3. Diagrammatically represent and explain what happens if the economy is at its long-run equilibrium and short-run aggregate supply decreases?
Q: Refer to the above diagram. Assume the economy is operating at point Z. If we choose to leave the…
A: With economy operating at below potential output(LRAS) at point Z, if the economy will left for self…
Q: 4. Discuss why the aggregate supply (AS) curve is relatively flat within the low ranges of aggregate…
A: There are three ranges of aggregate supply curve, which determines whether use of fiscal or monetary…
Q: d. Suppose an economy is in long-run equilibrium with aggregate demand and supply curves…
A: Economy is in long run AS curve shifts left i.e., supply decreases due to increase in oil prices…
Q: 3. Suppose that we observe a fall in expected rate of return. Which graph most accurately shows how…
A: The anticipated gain or loss from an investment by the investor is known as the expected rate of…
Q: 5. An economy is initially in equilibrium, both in the short-run and in the long-run. Using the AD,…
A:
Q: Discuss what is meant by Aggregate supply (AS) and the AS curve; why is it relatively horizontal at…
A: ‘Aggregate demand’(AD) is the overall demand(DD) of the ‘goods & services’ in an ‘economy’.…
Q: 6. Draw a graph of the Dynamic Aggregate Demand Curve and explain it clearly. 8. Draw a graph and…
A: Answer (6) AD or aggregate demand is referred to as the amount of total expenditure on domestic…
Q: Assume the U.S. economy has been operating at output levels beyond full employment. (a) Draw a…
A: As there are multiple questions, answering the first question among them. Kindly repost the other…
Q: 18 - : If aggregate demand increases in an economy while aggregate demand is constant in the short…
A: NOTE: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: 2. Please use a graph to produce aggregate supply in classical model under the assumption of nominal…
A: Before the Great Depression, the Classical Model was popular. It claims that the economy is very…
Q: 1. What are the major factors that determine investment, and what impact does each have on aggregate…
A: Investment is when people use their money to lend it to the producers to produce various consumer…
Q: 5) Which of the following is TRUE about the long-run aggregate supply curve? A) It is vertical at…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: 1. Which of the following will shift the Aggregate Demand curve to the left? (Select All that Apply)
A: Aggregate demand is the total demand for final goods and services produced domestically. Aggregate…
Q: 3. Suppose that we observe a decrease in wages. Which graph most accurately shows how this would…
A: Wages refer to the remuneration or the amount of money which is received by the workers after they…
Q: 6. What will be the new short-run equilibrium Real GDP in this case? Are we in an inflationary gap…
A: Output gap is the difference between potential output and actual equilibrium output.
Q: What might shift the aggregate-supply curve to the left? And explain why long run aggregate supply…
A: The AD or AS model is a macroeconomic model that describes how total supply and total demand…
Q: 6. From March 2009 to 2013, the U.S. stock market more than doubled in value. How might this have…
A: A doubling in the value of stock market also raises the value of money invested in the stock market.…
Q: Suppose that an economy that is initially in equilibrium sees an increase in investment spending.…
A: Equilibrium in the market of goods and services occurs at the intersection of aggregate demand and…
Q: 13. Suppose the economy is in a long-run equilibrium. a. Use the AD-AS model to graphically depict…
A: Dear student, you have asked multiple sub-part questions in a single post.In such a case, as per the…
Q: 5. Show how to derive the aggregate demand curve using the fixed-price Keynesian model.
A: The quantity supplied shows the relationship between a commodity's or service's price and the amount…
Q: this is all one question,but i dont know how these effect long run aggregate
A: Since we answer only 3 sub-parts at a time, we are answering the first three. If you want to get…
Q: what aggregate demand and explain its four components please
A: Spending is the total money incurred on purchasing products and services to satisfy consumer’s…
Q: 47) If there is a natural disaster, the long-run aggregate-supply curve shifts not at all, but…
A: A natural disaster is a supply shock for the suppliers of goods and services. It temporarily creates…
Q: 4. Show and explain the Keynesian and classical aggregate supply curves graphically. How does the…
A: Answer: Introduction: Aggregate supply curve: it shows the relationship between the amount of output…
Q: 4 In Bangladesh, we are expecting that the price of food items will increase after a few weeks in…
A: Demand and supply are two important concepts in economics used to determine the equilibrium price…
Q: QUESTION B2 The figure below depicts aggregate demand and aggregate supply in the nation of Pacifica…
A: We are going to use Aggregate Demand and Aggregate Supply equilibrium mechanism to solve this…
Q: A new mattress has allowed workers to get more sleep. As a result, when they are awake, they are…
A: Long run aggregate supply (LRAS) depicts the maximum level of output that a nation can produce by…
Q: 1. As the aggregate demand curve shifts to the right:
A: Shift in aggregate demand will have effects on both price level and real GDP.
Q: 5.5. Beginning with long-run equilibrium, use the aggregate demand and aggregate supply model to…
A: The above given cases are explained as follows:
Q: As the price level falls, people save more money because they feel richer. Financial frictions,…
A: Inflation and deflation are the two sides of a coin, in case of inflation purchasing power of…
Q: 2. If the economy is self-regulating, how do changes in aggregate demand affect the economy in the…
A: In the self-regulating economy, a market instability will be recovered or overcome by market…
Q: 1) Use an aggregate demand (AD) and aggregate supply (AS) model for each question to respond to the…
A: Economic Output The amount of products and services produced in a specific period is the "output" in…
Q: B. Using aggregate demand and aggregate supply curves, explain why NAIRU is not in the vertical…
A: The minimal degree of unemployment that can occur in the economy before inflation begins to rise is…
Q: 4. What effect would an increase in aggregate supply have on price levels and GDP? ***Please…
A: 4. In the above diagram, the X-axis represents the output and the Y-axis represents the price. Due…
Q: c) Discuss why the aggregate demand curve slopes downward (
A: Aggregate demand is the sum of expenditure incurred on the final goods and services by the various…
Q: Explain why the aggregate short-run aggregate supply curve is upward sloping? b. What is the…
A: The total amount of products and services produced in an economy at a certain price in a given…
Q: 4.2 List and discuss two (2) reasons for the downward sloping shape of the aggregate demand curve.
A: Please find the answer below. DOWNWARD SLOPING DEMAND CURVE: The downward sloping of the curve…
Q: 1.Draw Aggregate Demand, Short Run Aggregate Supply, and Long Run Aggregate Supply as if an economy…
A:
Q: 질문 3 Which of the following would cause a leftward shift of the aggregate demand curve? None of the…
A: Aggregate Demand refers to the amount of sales proceedings that an entrepreneur expects from the…
Q: 1. Define the short-run aggregate supply curve? Discuss the level of real output consistent with the…
A: Note- Since you have posted multiple independent questions in the same request, we will solve the…
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- Explain why the short-run aggregate supply curve might be fairly flat in the Keynesian zone of the SRAS curve. How might we tell if we are In the Keynesian zone of the AS?28. Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo, and AD1 and AS1 represent changes, which of the above graphs depict the economy's self-correcting mechanism at work? a) Figures A & B b) Figures A & C c) Figures C & D d) Figures B & D3. Under what circumstances an aggregate demand curve would shift either to the right or left? Provide some real world examples.
- 23. Explain why is a period of stagflation (inflation and recession at the same time) is part of the normal aftermath of a period of excessive aggregate demand?5. A new mattress has allowed workers to get more sleep. As a result, when they are awake, they are more productive at work. How would this type of change affect the long run aggregate supply curve? LRAS does not change LRAS shifts right LRAS shifts left The affect on LRAS cannot be determined12 Because fluctuations in the world oil price make the U.S. short-run macroeconomic equilibrium fluctuate, someone suggests that the government should vary the tax rate on oil, lowering the tax when the world oil price rises and in- creasing the tax when the world oil price falls, to stabilize the oil price in the U.S. market. How would such an action influence aggregate demand?
- 1. What are the major factors that determine investment, and what impact does each have on aggregate demand?. Explain why the aggregate short-run aggregate supply curve is upward sloping? b. What is the theory of liquidity preference? c. How does it help to explain the downward slope of the aggregate demand cure?(1) Suppose the economy is in long-run equilibrium. If there is a sharp increase in the expected price level, what do we expect to happen? Select one: (A) In the short run, the SRAS curve will shift left, real GDP and price will fall. (B) In the short run, SRAS will shift right, real GDP will rise and prices will fall. (C) In the short run, AD will shift left, real GDP and prices will fall. (D) In the short run, LRAS and SRAS will shift left, causing real GDP to fall.
- 6. From March 2009 to 2013, the U.S. stock market more than doubled in value. How might this have affected aggregate demand? What happens to aggregate demand when the stock market plunges?11. Which of the following statements about the Long-Run Aggregate Supply (LRAS) are true? a) The LRAS represents the full-employment level of real GDP. b) The LRAS represents the level of income and production consistent with resource markets equilibrium. c) The LRAS represents the potential production of the economy. d) All of the above. e) None of the above. 12. Which of the following describes the way in which the self-correcting mechanism of the economy resolves the problem of a recessionary gap? a) The recessionary gap is cured by an increase in government purchases of goods and services, which implies a shift to the right of the AD curve until full employment equilibrium is reestablished. b) The unemployment associated with a recessionary gap causes wages to fall, increasing Aggregate Supply and thus shifting the AS curve to the right until a full employment equilibrium is reestablished. c) The unemployment…2. Use the model of aggregate demand and short-run aggregate supply to explain how each of the following would affect real GDP and the price level in the short run. an increase in government purchases a reduction in nominal wages a major improvement in technology a reduction in net exports