Which payment method typically charges the highest interest rates? A Credit cards B Cashier's checks C Pre-paid cards D Payday loans

Answer:

The correct answer is d) neither the long-run Phillips curve nor the Classical dichotomy.

Explanation:

The answer that best suits the situation described is the Phillips curve in the short term but not in the long term.

The Phillips curve starts from the principle that the amount of money circulating (commonly called "money supply") has real effects on the economy in the short term. In this way, an increase in the money supply would have a beneficial effect on aggregate demand, as citizens will spend more when their nominal wages are increased (known as “monetary illusion”) and a more favorable framework for investment and investment will be created. that the prospects of rising prices will improve the expectations of corporate profits. The improvement in aggregate demand would result in greater economic growth, and this in turn in the creation of new jobs. This is how an inverse relationship between inflation and unemployment is established, expressed graphically by a downward curve.

Final answer:

The theory of the long-run Phillips Curve, but not the Classical Dichotomy, might imply that the unemployment rate in Flosserland could be above the natural rate due to persistent high inflation.

Explanation:

The correct answer to this question - which posits what would happen if Flosserland has maintained a long term inflation rate of 25% - is (c): the long-run Phillips curve, but not the Classical dichotomy. This conclusion is drawn from understandings of both the Classical Dichotomy and the long-run Phillips Curve.

The Classical Dichotomy is a theoretical construct that assumes a separation between real and nominal variables in an economy, indicating that changes in the money supply only affect nominal variables and wouldn't directly influence real economic factors like unemployment.

Conversely, the long-run Phillips Curve, is vertical suggesting there's no long-run trade-off between unemployment and inflation. In the long-run, changes in the inflation rate would not lead to a change in unemployment from its natural rate. However, if Flosserland has had a long-term high inflation rate, it's possible that expectations have not adapted and therefore unemployment could be above the natural rate. So only the long-run Phillips curve might suggest higher unemployment, but not the Classical dichotomy.

Learn more about Monetary Policy here:

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Answer:

Taking these three transactions into account, what is the effect on GDP?

c.GDP increases by $5.00

Explanation:

The Gross Domestic product usually abbreviated as the GDP, is a measure of how much a goods and services a country can produce during a particular time period. The quantity of goods and service is usually expressed in monetary terms. it serves a a broad measure of a country's overall economic status. A higher GDP usually implies that the quantity of goods and services being produced in monetary terms is very high, there for it can be concluded that the general health of the economy is good.

To determine the GDP in our case, we need to determine the total value of a finished product to determine how much the GDP changes. The intermediate good is not included since it is not sold as a finished product but as a raw material in the production of a finished product. The following commodities are sold as finished products, for example; the bread and the second bag of floor. The change on GDP is as follows;

Change in GDP=Final GDP-initial GDP

where;

Change in GDP=unknown, to be determined

Final GDP=0+3+2=$5.00

initial GDP=assumed to be 0

replacing;

Change in GDP=5-0=$5.00

The effect on GDP is an increase of $5.00.