Assume that a country’s economy is in a short-run equilibrium and the actual unemployment rate is lower than
the natural rate of unemployment.
(a) Using a correctly labeled graph of the long-run aggregate supply curve, short-run aggregate supply curve,
and aggregate demand curve, show each of the following.
(i) Current price level, labeled PL1, and current output level, labeled Y1
(ii) The full-employment output level, labeled YF
(b) What open-market operation can the country’s central bank use to move the economy toward its long-run
equilibrium?
(c) Use a correctly labeled money-market graph to show how the country’s central bank action to move the
economy toward its long-run equilibrium affects the equilibrium nominal interest rate in the short run.
(d) Based on the interest rate change from part (c), will each of the following increase, decrease, or remain the
same in the short run?
(i) Real output. Explain.
(ii) Natural rate of unemployment
(e) Assume instead that the central bank does not pursue the monetary policy action from part (b) and there was
no other government intervention. Will each of the following increase, decrease, or remain the same in the
long run?
(i) Short-run aggregate supply. Explain.
(ii) Employment

Assume a 10 percent reserve requirement.
(a) Calculate Raymond Bank’s required reserves.
(b) Calculate the maximum amount of additional loans that Raymond Bank can make without selling its
holdings of government securities.
(c) Assuming that Raymond Bank and other banks now lend out all excess reserves, calculate the maximum
possible change in the following.
(i) Demand deposits throughout the banking system
(ii) Total reserves throughout the banking system
(d) Suppose that the country’s central bank purchases $1,000 of Raymond Bank’s holdings of government
securities as part of its open-market operations. Do Raymond Bank’s required reserves initially increase,
decrease, or remain the same as a result of the central bank’s purchase? Explain.

Singapore and Japan are trading partners. The Japanese economy is operating at full employment, and Japan’s
current account balance is zero.
(a) Assume the exchange rate between the Singapore dollar (SGD) and the Japanese yen (JPY) changes from
1 SGD = 82 JPY to 1 SGD = 65 JPY. Does the JPY appreciate or depreciate against the SGD?
(b) Given your answer in part (a), will each of the following increase, decrease, or remain the same?
(i) The price of Japanese goods in Singapore dollars
(ii) Japan’s net exports
(c) Draw a single correctly labeled graph with the long-run Phillips curve and short-run Phillips curve for Japan.
On the graph, show the new short-run equilibrium as a result of the change in Japan’s net exports from
part (b)(ii), labeled point X.
(d) Given your answer in part (b)(ii), will each of the following be in deficit, surplus, or zero for Japan?
(i) Current account balance
(ii) Financial (capital) account balance

if truly rate of actual unemployment is lower compared to the natural unemployment, it implies that the economy is making a greater effort for higher output level than its potential output.

Lower unemployment than natural rate of unemployment will reflect as lower availability of workers in the economy ,so unions and workers start demanding more wages ,which leads to increase in production cost of firms . Increase in production cost ,leads to decrease in firms supply and short run aggregate supply curve shifts lefttwards and SRAS keep shift to left till economy reach to full employment or potential GDP.As GDP Decreases no of workers Decreases and employment Decreases.

Conclusion: Short run aggregate supply Decreases and employment Decreases.

jayilych4real jayilych4real · Answer 2 · 2022-04-12T18:36:46+02:00

The conclusion which can be made is that the Short run aggregate supply decreases and employment decreases.

What is Unemployment?

This refers to the group of people of a certain age being without paid labor.

Hence, we can infer that if the rate of actual unemployment is lower compared to natural unemployment, then the economy is making a greater effort for a higher output level than its potential output.

Also, as a result of the unemployment rates, there would be low availability of workers which will in turn lead to:

Increase in production costs
decrease in firms' supply
short-run aggregate supply curve shifts leftwards
SRAS keeps shifting to the left till the economy reaches full employment or potential GDP.

Read more about unemployment rate here:
https://brainly.com/question/13280244