Economics Homework: Analyzing Economic Policies and Data

This economics homework assignment covers a range of macroeconomic concepts and principles. The assignment begins with questions on supply and demand, including calculating elasticity and analyzing market behavior. It then delves into poverty definitions, the impact of early childhood interventions, and the production possibilities curve. The homework also involves calculations related to GDP, including nominal and real GDP, growth rates, and the GDP deflator. Additional topics include the money supply, the spending multiplier, and the difference between fiat and commodity money. Furthermore, the assignment explores different schools of economic thought, fiscal policies, and the economic policies of the Reagan administration. The final part of the assignment requires filling in blanks in tables and answering questions related to various economic scenarios.

Week 6 Homework
(1) (8 points, 1 points each blank) Use the table below to fill in the blanks
(questions (a) - (h))
(2) (3 points) In one sentence, what is the difference between fiat and
commodity money?
The commodity money has intrinsic value. On the other hand, fiat does not
have intrinsic value.
(3) (12 points total, 4 points each part) Suppose you withdrew $100 cash from
your checking account. What impact (increase, decrease, or no change)
would this action alone have on the following:
(a) The money supply
the withdrawal will reduce the money supply by a multiple of withdrawal
amount.
(b) Your bank’s level of required reserves
the bank’s level will also be reduced because of the withdrawal.
(c) Your bank’s level of excess reserves
The withdrawal will increase the bank’s level excess service.
MP
C
Spending
Multiplier
Change in Government
Spending
Change in
Income
2.5 5 $100 105
.05 2.5 227.5 -$250
0.5 7 $200 125
0.2 4 25 $1,000

(4) (4 points) Using a required reserve ratio of 5% and if banks keep no excess
reserves, what is the value of government securities the Fed must purchase if
it wants to increase the money supply by $2 million?
X*10=2000000 divide both sides by 10
In this way, it will be X= 2000000/10X
= $200,000 in securities