(1) Draw a generic Aggregate Supply (AS) and Aggregate Demand (AD) curve on a set of axes. Label your vertical axis and your horizontal axis appropriately and indicate where the macroeconomic equilibrium is. (2) Then find a current events article that discusses some macroeconomic event that will affect either AS or AD. Represent this effect using a rightward or leftward shift as appropriate. (3) Interpret the effect on the price level, output, and unemployment in the context of your model as applied to your current events article.

(1) Draw a generic Aggregate Supply (AS) and Aggregate Demand (AD) curve on a set of axes. Label your vertical axis and your horizontal axis appropriately and indicate where the macroeconomic equilibrium is. (2) Then find a current events article that discusses some macroeconomic event that will affect either AS or AD. Represent this effect using a rightward or leftward shift as appropriate. (3) Interpret the effect on the price level, output, and unemployment in the context of your model as applied to your current events article.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance

Section: Chapter Questions

Problem 1.1P

See similar textbooks

Similar questions

Suppose firms become optimistic about futurebusiness conditions and invest heavily in new capitalequipment.a. Draw an aggregate-demand/aggregate-supplydiagram to show the short-run effect of thisoptimism on the economy. Label the new levels ofprices and real output. Explain in words why theaggregate quantity of output supplied changes.b. Now use the diagram from part (a) to show thenew long-run equilibrium of the economy. (Fornow, assume there is no change in the long-runaggregate-supply curve.) Explain in words whythe aggregate quantity of output demanded changesbetween the short run and the long run.c. How might the investment boom affect thelong-run aggregate-supply curve? Explain.
) Consider the following closed economy SImodel set upY = 18000C = 300 + 0.8(Y − 2500)I = 3500 − 400(r)G = 3000T = 2500(a) Compute the impact on r and I, if Gincreases by 500.(b) Compute the impact on r and I, if Gincreases by 500.(c) Compute the impact on r and I, if bothG and T increase by 500.
You are an economic advisor to the government. Discuss your opinion . a) How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the firms and household for the next two years? b) What are the actions or policies that the government can implement to face this situation? please answers with analysis and --graph (if possible)
Assume an economy operates in the intermediaterange of its aggregate supply curve. State thedirection of shift for the aggregate demandor aggregate supply curve for each of thefollowing changes in conditions. What is theeffect on the price level? On real GDP? Onemployment?a. The price of crude oil rises significantly.b. Spending on national defense doubles.c. The costs of imported goods increase.d. An improvement in technology raises laborproductivity.
please explain each question. 1. We assumeconstantMPC in our model. Is this assumption true in the real world? 2. What determines the proportion of bonds/money that the household keeps? 3. What effect an increase of government spending will have on the output equilibrium in the goods market? Explain using autonomous spending.
What assumptions about the economy must he true for the invisible hand to work? To what extent are those assumptions valid in line real world?
If inflation rises unexpectedly by 5, would a state government that had recently borrowed money to pay for a new highway benefit or lose?
COVID-19 has undoubtedly been a defining time in our generation's history, with effects on global economies comparable insome instances to what was experienced during the Great Depression of the 1930s. The pandemic has also recalled theeconomic shockwaves of the Global Financial Crisis of 2008/09. One can argue that this episode is like none seen beforebecause it hasn’t emanated from economic factors. The pandemic is also having a broad spectrum of effects on economiesand exchange rates globally.
Possitive short run relatioship between the prices level for outpput and reall gdp holding the prices of inputs fexed a- longo-run aggregate supply SRAS curve b- long run aggregate demand SRAS curve c- short eun aggregate supply SRAS curve d- short-run aggregate demand SRAS curve
1. a. How has Consumer Spending become a macroeconomic issue during the covid-19 pandemic? b. what specific government post covid-19 policies can be implemented to increase Consumer Spending c. Explain your rationale for the choice of policies in (b) (Please provide relevant graphs with ansewers)
Course: Macroeconomic - IS-LM Model Prove mathematically the following: Given an increase in the proportional tax on income(t), what happens to the level of output and to the tax?" . Hint: for demostration, use the IS general function for a closed economy Y = C + I + G, where C = a + c*YD and YD = Y + TR - Y*t (where t = proportional income tax) and realize changes i.e., from "t1" to "t2"
When AP L is positive but declining, the MP L could be (i) declining (ii) zero (iii) negative or (iv) any of them. Which one is the correct alternatives? Explain with diagram.