5) Give a detailed analysis of supply side economics. a. Graphically illustrate a negative supply shock. b. Graphically illustrate the Laffer curve and explain the policy implications. C. Discuss the key provision of supply side economics.
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- 4. Carefully understand and analyze the following scenario. Mask mandates are lifted recently and consumers are optimistic in the current environment. What would be the short and long run impact of improved consumers’ confidence in coming months assuming the economic is in no gap situation currently?When one focuses on aggregate demand and aggregate supply in macroeconomics, the main focus is on..... a. whether the goods are useful and wanted by consumers. b. whether the goods generate either positive or negative externalities c. what total spending is in relation to total production and its effects on the macroeconomic problems of unemployment and inflation d. both a) and b) are correct1.Draw Aggregate Demand, Short Run Aggregate Supply, and Long Run Aggregate Supply as if an economy is in both short run and long run equilibrium. 2. Suppose the price of oil (an input in the production of many goods) decreases. Show how this will affect the model starting from (1) above. What happens to GDP, The Price Level, and Potential Output? Is the economy in a recessionary gap or an inflationary gap? 3. Suppose that consumers feel confident about their futures. Show how this will affect the model starting from (1) above. What happens to GDP, The Price Level, and Potential Output? Is the economy in a recessionary gap or an inflationary gap? 4. Explain in detail and show graphically how the economy will naturally (No government or central bank intervention) return to long run equilibrium after the event from (3) above (don’t consider the event from part 2; only 1 and 3 are relevant to this question) . (the numbers are the numbers of the question from example in question 3 the 1…
- 1. What Will Happen to QD, QS, D, S, P, and Q if Toyota, GM, and Ford increase production of windshields due to higher demand expectations?2. Explain what types of policies the Federal government implemented to restore aggregate demand and the potential obstacles policymakers may have encountered during the corona virus pandemic. The Federal government cut interest rates, make credit more available, and the stimulus checks.Question:- Comment, on the likely outcome with sufficient arguments? a) Impact on aggregate demand of the economy if imports are greater than exports.b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India.c) Inflation rate in the country has reached 6.73%.d) Impact on GDP when, Interest rates have come down in the countrye) Impact on balance of payment, when there is a huge demand of vaccines produced in India in South Africa.f) Inflation rate in India reaches negative 2% (-2%)g) The aggregate demand falls short of aggregate supply in the economy
- Comment, on the likely outcome with sufficient arguments? a) Impact on aggregate demand of the economy if imports are greater than exports.b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India.c) Inflation rate in the country has reached 6.73%.Using SDM, show the impact of the demand shocks on the equilibrium of the auto market. Graphically show the change in consumers, producers, and total surplus. Notes: label the relevant areas of the graph and show the change in consumers, producers, and total surplus.3. Is the above model consistent with the policy ineffectiveness proposition? How does the policy implication of the model differ from that of the traditional static AD-AS model with exogenous expectations or adaptive expectations? Explain.
- 15. What does the slope of the SAS curve represent? Give one example of something that might change the slope. How will demand-driven recessions look different when the slope changes? Illustrate your answer by modelling a demand-driven recession against differentlysloped SAS curves. (Please draw a diagram or answer is incomplete!) 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.7. Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo respectively, and AD1 and AS1 represent changes, which of the above graphs depict the work of Keynesian macroeconomic policy? a) Figures A & B b) Figures A & C c) Figures C & D d) Figures B & D1.True or False: Businesses and government care only about long-run economic forecasts, because they cannot adapt policy or output to accommodate short-run fluctuations. 2.Suppose the most recent data show that the average initial weekly claims for unemployment insurance have recently increased. This change suggests a )RECCESSIONARY or EXPANSIONARY) period in the coming months? 3.Economists disagree about how quickly the economy adjusts to an aggregate demand shock. In the view of some economists, people form expectations based on present realities and change expectations gradually as their experience unfolds. Such expectations are said to be rational, unexpected, adaptive, reasonable, or great ? 4. Suppose an unanticipated increase in investment spending causes the aggregate demand curve to shift to the right (from AD1AD1 to AD2AD2). According to adherents of the adaptive-expectations theory, the unanticipated change in aggregate demand will cause the economy to move in which…