Assume that Rankinland produces only food and clothing. Attract a properly labeled production possiblibites curve because that Rankinland. Display a allude that might represent the existing output mix and brand it A.

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Assume that the central Bank the Rankinland pursues an expasionary monetary policy. Identify the open-market operation that the main Bank would certainly use
Draw a correctly labeled money sector graph and also show the short-run result of the expansionary financial policy on the nominal attention rate
Assuming no readjust in the price level, what wake up to the real interest price as a result of the expansionary financial policy? Explain.
real interest rate will fallprice level continuing to be constant, as soon as the in the name interest price falls, the actual interest rate additionally falls
Given her answer in (b) (iii) concerning the actual interest rate, what wake up to the gross residential product (GDP) in the quick run? Explain.
real GDP will increase in the brief run and also investment or consumption increases, causing accumulation demand to increase
Suppose Rankinland has actually a existing account deficit. Rankinland"s currency is dubbed the bera. What will initially take place to the current account deficit in Rankinland solely as result of the change in the genuine GDP from component (b) (iv)? Explain.
current account deficit will decreaseincrease in real GDP rises income, which reasons imports to increase and also net exports come decrease
What will take place to the international value of the bera solely as result of the adjust in the actual GDP from part (b) (iv)? Explain.

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international worth of the bera will certainly decreasedecline in the global value the the bera is due to increase in the supply of the bera
The adhering to is a simplified balance sheet because that Mi Tierra bank in the US. What is the to make reservation requirement?
Assume that luis withdraws $5,000 in cash native his checking account at Mi Tierra Bank. By just how much will certainly Mi Tierra Bank"s reserves change based on Luis" withdrawal?
the $5,000 withdrawal has no effect on the M1 measure up of the money supply due to the fact that it only changes the ingredient of M1 between cash and demand desposits
As a result of the withdrawal, what is the brand-new value the the overfill reserves top top the balance paper of Mi Tierra bank based ~ above the reserve requirement from part (a)?
Assume the the next day man withdraws native Mi Tierra financial institution an amount the exceeds the bank"s overabundance reserves. Assuming the no loan are called in, how deserve to Mi Tierra financial institution cover its compelled reserves?
Assume that economy of Andersonland is in a long-run equilibrium with full employment. In the short run, in the name of wages space fixed. Draw a properly labeled graph the the short-run supply, long-run accumulation supply, and accumulation demand. Show each of the complying with (Equilibrium calculation (Y1) and Equilibrium price level (PL1)
Assume the there is boost in exports indigenous Andersonland. On her graph in component (a), present the impact of higher exports on the equilibrium in the brief run, labeling the new equilibrium output and price level Y2 and PL2 respectively
Based on her answer in part (b) what is the influence of higher exports on actual wages in the quick run? Explain.
real wages will fall due to the fact that the price level has increased and also the nominal wages are addressed in the short run
As a an outcome of the increase in exports, export- oriented industries in Andersonland increase expenditures on new container ships and also equipment. What ingredient of aggregate demand will change?