Please answer each of the questions below in short-answer format. Write your responses in complete sentences. Your answers to each question should include 2-3 paragraphs (125-250 words).
Be sure to carefully read each question to ensure that each component is answered with the appropriate depth and detail. Your answers should be free of spelling and grammar errors. When you use reference material, you must properly cite your sources by using in-text citations. You must also include a reference list. All documentation must be rendered in APA citation style (see announcements for details on APA).
Q1. What shape did the short-run aggregate supply curve have during the 1930s, according to Keynes?
Q2. What is the multiplier? How is it calculated? Why is the multiplier related only to consumption spending?
Q3. What are the macroeconomic consequences of a budget deficit when the economy is operating at full employment? Be sure to discuss the effects in the short run and long run
Q4. Suppose that the Fed purchases $1 million in bonds in the open market. Explain how the money supply can increase by more than $1 million.
Q5. What happens to the price of bonds when the Fed sells bonds? What happens to the interest rate? What happens to the money supply?
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