Aggregate demand and supply curves have been widely used to analyze the performance of the macroeconomy. Figure 6-3 shows four diagrams that represent different changes in the macroeconomy. Choose the diagram that best represents the situations described in the following questions. FIGURE 6-3 Real GDP Real GDP Real GDP Real GDP (1) (2) (3) (4) 19. 1Which graph best represents a government stabilization policy to counteract inflation? a. 1 b. 2 c. 3 a.4

Aggregate demand and supply curves have been widely used to analyze the performance of the macroeconomy. Figure 6-3 shows four diagrams that represent different changes in the macroeconomy. Choose the diagram that best represents the situations described in the following questions. FIGURE 6-3 Real GDP Real GDP Real GDP Real GDP (1) (2) (3) (4) 19. 1Which graph best represents a government stabilization policy to counteract inflation? a. 1 b. 2 c. 3 a.4

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 3SCQ: The short run aggregate supply curve was constructed assuming that as the price of outputs...

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Please no written by hand solution Consider the following economic situations:C = $4.0 trillionI = $1.5 trillionG = $3.0 trillionT = $3.0 trillionNX = $1.0 trillionF = 0mpc = 0.8d = 0.35x = 0.15r = 1% λ = 0.5A. Calculate an expression for the IS, MP and AD curves ( r= ?, IS Y= ?, AD Y=?)B. Let AS curve be given by the relation: π = 6 + 1.5 (Y - 25.5) (i.e. the price shock is zero). What are the equilibrium values of inflation, output and the real interest rate(π, Y, r)?C. Suppose government purchases are raised from $3.0 trillion to $3.5 trillion. What are new short-run equilibrium inflation values, output and the real interest rate (π, Y, r}?D. Suppose a financial crisis begins, and ƒ increases ƒ = 3. (Assume government purchases are again as in part (a). What are the new short-run equilibrium values of inflation, output, and the interest rate (π, Y, r}?(Please solve all the parts with numerical steps so it could be practiced easily)
for question given below i =90 g=60 t= 25 c0 automous consum = 30 c1 marginal consum = 0,8 calculate the aggregate demand Y and savings rate s
Based on the below information, help Renwick economy find the equilibrium level of output. Aggregate Demand Aggregate Supply Equilibrium YAD = C + I + G YAS = A Kα L1-α YR =0.5YAD+ 0.5YAS C = 600 + βYD A = (1 + g) Ao YD = YR + TR - tYR K = 35 TR = 55 L = 80 G = 120 g = 6% I = 50 Ao = 150 t = 0.15 α = 0.65 Where C is private consumption, YD is disposable income; TR, G and I are transfer payments, government spending and total investment, respectively. A in the index of technology and K and L are capital and labour inputs. A0 is the initial levels of A and L, both assumed to be 150, while g is the growth rates. The MPC is 0.60. a.) Find aggregate demand…
10. Which of the following are reasons why the short-run Aggregate Supply curve shown in the right-hand diagrams may be vertical? a) The economy at this level of real GDP would be operating beyond the full-employmetn level. b) Inflationary expectations have set-in so, the owners of resources are acting on these inflationary expectations and insisting on higher resource prices in anticipation of future products price inflation. c) Short-run Aggregate Suply in the Classical model is always constant. d) All the above e) Only (a) and (b) are true. f) None of the above.
1. Using the AS-AD model, graph and explain the effects of Covid-19 on the U.S. macroeconomy by comparing 2019 vs. 2020. Label the years on all curves, the axis, and the equilibrium. Ignore macroeconomic policy responses, such as the CARES act. Which curves shifted which direction, and why? 2. Now introduce any macroeconomic policy response. What curves shift which direction, and why? 3. What were the equilibrium quantities for both axis?
Consider an economy called Xanadu for which desired aggregate consumptiondepends on income, Y. and the real interest rate, r, according toCd =100+0.7Y - 200r.Xanadu's GDP is Y = 1000 and government spending on goods and services is G=180. Xanadu's desired future capital stock is given byK* = 140 - 100ucwhere luCdenotes the user-cost of capital. The price of capital is PK =2, thephysical depreciation rate is d =0.1 and the existing capital stock is K0= 50. Trapital stock between any period t and the following period t+1 evolves accordng toKt+1 = It+(1-d)Kt where It the level of investment. Assume throughout that net factor payments from abroad (NFP) is equal to zero.Suppose instead that Xanadu is a small open economy facing a world interest rate of 1%. It follows that Xanadu's current account position is equal toA) -16B) -51C) -6D) -8
18 - : If aggregate demand increases in an economy while aggregate demand is constant in the short run, which of the following statements is correct for the new equilibrium point?A) price decreases and national income increasesB) price rises national income risesC) price increases and national income does not changeD) price goes up and national income goes downE) price decreases and national income decreases.19 - : In which of the following expressions is the equation of change given correctly?A) MV=VK B) MT=PV C) MV=PT D) MP=VY E) MV=P
A) Explain thoroughly how reducing recession works B) Explain why the presence of the built-instabilizer is important to managing the macroeconomy.
Suppose that Dell Corporation has 20,000 computersin its warehouses on December 31, 2019, ready tobe shipped to merchants (each computer is valued at$500). By December 31, 2020, Dell Corporation has25,000 computers ready to be shipped, each valuedat $450.a. Calculate Dell’s inventory on December 31, 2019.b. Calculate Dell’s inventory investment in 2020.c. What happens to inventory spending during theearly stages of an economic recession?
1 As more of the nation s systems of river locks 1. As more of the nation’s systems of river locks become deficient, what is happening to the pace at which the U.S. production possibilities curve shifts outward over time? 2. How are deficiencies in the U.S. river system affecting the extent to which the U.S. long-run aggregate supply come shifts rightward each year? 1 As more of the nation s systems of river locks
a) Consider that the Ghanaian economy is a Small and close, which ischaracterised by the following.AD=C+I+G+NXC=a+bY*Y*=disposalincomeT=T 0I=I 0G=G0Md/P=Ld(Y,i)Ms=money supply, which is given.AD=Aggregate demand, C=consumption, G=Government expenditure, T=Tax, P= Price level, I=Investment, NX=Net exportsa)Consider an increase in Government spending ∆ > .Assume for now thatboth price and expected price are fixed. Also assume that government doesnot implement any other policy than the increase in Government spending.What is the effect of this policy on the goods market? b)What is the effect on equilibriumin the money market? Present your answer ina well-labelled diagram, showing both money supply and demand before thepolicy was implemented, and that after the policy was implemented in thesame graph. c)Solve for equilibrium in the goods market.d)Suppose the policy change is rather an increase in real money supply not a decrease in government spending. What is the effect of this policy…
09. The left-hand Which of the following statements is tru about the diagrams above depicting the macroeconommy in both Keynesian and Classical frameworks and a change from AEo to AE* and ADo to AD*? a) The left-hand diagrams show the effect of an increase in Aggregare Expenditures (and Aggregate Demand), where the short-run Aggregate Supply is horizontal, meaning a constant products price level. b) The right hand diagrams show the effect of an increase in Aggregate Expenditrues (and Aggregate DEmand), where short-run Aggregate Supply is vertical (constant Aggregate Quantity Supplied). c) The left-hand diagrams illustrate the Keynesian range of the shor-run Aggregate Supply curve, where Keynesian expansionary policy does not cause any inflation and thus is very effective. d) The right-hand diagrams illustrate the Classical or Monetarist range of the short-run Aggregate Supply curve, where Keynesian expansionary policy is totally dissipated in…