1. The aggregate supply (AS) - aggregate demand (AD) model can be used to analyze short run economic events, but not long run changes. True False
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- AD-AS (aggregate demand/supply) Changes What things cause aggregate demand to shift? Why does each cause AD to shift? What things cause SRAS (short run aggregate supply) to shift What things cause LRAS (long run aggregate supply) to shift What graph/model does this relate to?Given the Aggregate demand function of US AD= 5000 + 0.7Yd. Interpret this equation and diagramatically express the equilibrium output.define Aggregate Demand, give a couple of examlples tied to todays current events (a couple paragraphs)
- You will use the aggregate demand and supply model to analyze the economy. a. Draw the Aggregate Demand (AD), the Short-Run Aggregate Supply curves (SRAS) in one diagram. Make sure you label the axis and each line. Call the initial equilibrium Y1, P1. b. We observe an increase in aggregate demand. Illustrate this increase in your graph. Call the new equilibrium Y2, P2 can you please make the graph Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Implement the following economic models and explain graphicaly what happened in economic events using the following 1. IS-LM model and government intervention 2. Short run aggregate supply (SRAS) 3. Slow economic recovery. Including Philip curveKnow key terms: Explain in your own words (not google) the following:-LRAS-Aggregate Demand-Aggregate Demand Curve
- The Aggregate Supply (AS) curve slopes upward to reflect the profit motive of businesses. So, why are there two versions of the AS curve( i.e. short run and long- run). DiscussExplain the macroeconomics in the context of following;a. Aggregate supply and demandb. Shifts in the aggregate demand curvec. Inflation - causesDetermine the effect on aggregate demand/ Short Run Agrregate supply of each of the followingevents. Explain whether it represents a movement along the aggregate demand/ Short run Aggregatesupply curve (up or down) or a shift of the curve (leftward or rightward).a) News of a worse-than-expected job market next yearb) A rise in the consumer price index (CPI) leads producers to increase output.c) A rise in legally mandated retirement benefits paid to workers leads producers to reduceoutput.d) As a result of an increase in the value of the dollar in relation to other currencies, Americanproducers now pay less in dollar terms for foreign steel, a major commodity used in production.e) An increase in the quantity of money by the Federal Reserve increases the quantity of moneythat people wish to lend, lowering interest rates.f) Greater union activity leads to higher nominal wages.g) A fall in the aggregate price level increases the purchasing power of households’ and firms’money holdings. As…
- a) What is 'Business Cycle'? b) What is the defination of: leading indicator, coincident indicator, and lagging indicator? Provide 2 examples of each leading, coincident and lagging indicator c) Define the three ranges of the aggregate supply curve in the AD/AS frameworkTopic: macroeconomics, AD-AS Model What Is the Effect on AD? Determine the effect on the short-run aggregate demand (AD) curve for each of the following scenarios and Please Graphically illustrate answer for each # 1-5. 1. A decrease in consumer wealth is due to a plunge in stock prices. 2. Households and businesses have more optimistic expectations regarding future economic performance 3. There are higher levels of investment spending by businesses. 4. The government cuts taxes for households and businesses. 5. The Fed decreases the money supply.Evaluate the following statements using relevant diagrams and provide detailedexplanations. The statements describe events that might shift aggregate demand (AD),aggregate supply (AS), both or neither. Clearly label your diagrams. A) A recent economic report suggests that consumer confidence has increased.B) Apple Inc. has announced a 50% discount on its new generation iPad devices foruniversity students.C) After a prolonged acceleration in economic activity, the government raises the rateof personal income tax.D) A continuing economic expansion has drawn in many working age people (andtheir families) from neighbouring countries in search of jobs and better lives.