Do you believe that the Hayek's classical AD-AS model explains the factors that cause changes (shifts) in AS realistically? Why or Why not?

Q: What are some problems with Keynesian business cycle theory? A. It does not predict stagflation B.…

A: According to Keynes, the vacillations in the marginal efficiency of capital lead to the business…

Q: What is the neoclassical zone of the SRAS curve? How much is the output level likely to change in…

A: A wide concept that relies on market forces as the key factors under the output, costing, and…

Q: Explain why in our New-Keynesian model, equilibrium out- put (Y) and employment (N) are…

A: According to New-Keynesian model, the equilibrium out- put (Y) and employment (N) are…

Q: In both the classical and Keynesian model, the interest rate falls in a recession. O True O False

A: The amount being due per period being as a proportion of the amount that is either being deposited,…

Q: What role does the IS curve play in our short-run model? What kind of eco-nomic questions does it…

A: In IS curve it is considered goods market where aggregate demand and aggregate supply considered.…

Q: Q: To what extent has the time-inconsistency problem influenced the formation and practical…

A: Time inconsistency is a problem that arises when policymaker follows one policy in advance but later…

Q: Using the dynamic AD/AS model, explain why Kennedy is concerned about the state of the global…

A: Aggregate Demand (AD) refers to the total demand for goods and services in an economy. Aggregate…

Q: Q)Using the dynamic AD/AS model, explain why Kennedy is concerned about the state of the global…

A: The dynamic AD/AS model is a concept which uses the aggregate demand and aggregate supply…

Q: JobKeeper was designed to keep people employed and ‘sustain’ the economy through the enforced…

A: The wage subsidy(job keeper policy) is the direct payment to the worker by the government. It…

Q: What is the fundamental source of transition dynamics in our AS/AD frame-work?

A: AS-AD framework is one of the most important topics covered in Macroeconomics. In AS-AD model output…

Q: Please use classical model AD-AS analysis (i.e. state AD, SRAS or LRAS shift rightward or leftward)…

A: By using the classical model-

Q: Explain Various Assumptions of Classical Macro Economics Theory.

A: Classical Economist is that economist who had a view that prices are completely flexible, this tells…

Q: Please help me with this. Thank you! Indicate what to you is our most urgent or relevant…

A: Macroeconomics is a part of economic branch which studies the economy as a whole, or we can say it…

Q: Author claims, “The pandemic was unexpected shock. Climate change and climate policy are known…

A: The aggregate demand curve shows the inverse relationship between the price level and the total…

Q: Why AD is never a constraint in the classical model?

A: Answer: The classical model assumes that supply creases its own demand (Say's law). So no matter how…

Q: Explain, using the AD-AS model, the effects of an increase in investment in the macroeconomy on the…

A: Macroeconomics is a sub-part of economics that is used to understand, the policies and fiscal…

Q: Using the dynamic AD/AS model, explain why Kennedy is concerned about the state of the global…

A: Aggregate demand(AD) is the sum of all the quantity demanded(QD) for goods and services that…

Q: Regardless of many assumptions, an equilibrium business-cycle model can go a long way in matching…

A: Business-cycle: It refers to the conditions under which the growth and decline have been taken into…

Q: Explain, using the AD-AS model, the effect of an increase in investment in the macroeconomy on the…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: What is Break? how breaks play an important role in macroeconomic data?

A: Answer - Breaks - Breaks are the sudden change in property time series data .These changes can be…

Q: Prior to the pandemic, economic growth had typically been accompanied by decelerating or declining…

A: ANSWER   The economic growth can be obtained by two ways - Rise in AD or Rise in AS.

Q: According to Keynesian business cycle theory, what should the government do in response to a…

A: A recession is a situation in which economic activities start to decline in the economy of a…

Q: What must be true of the model parameters and variables of the AD-AS curves in the long-run…

A:

Q: Explain how unemployment and inflation impact the AD/AS model.

A: The aggregate demand–aggregate supply model is a macroeconomic model that determines the level of…

Q: What is the Classical Dichotomy, and how is it explained with AS and AD diagram and concepts?

A: Classical Dichotomy is explained as when the changes in the quantity of money occurs, it only…

Q: Using the dynamic AD/AS model, explain why expert is concerned about the state of the global…

A: Aggregate Demand (AD) is the total demand for goods and services in an economy. The Aggregate Supply…

Q: Author claims, “The pandemic was unexpected shock. Climate change and climate policy are known…

A: The aggregate demand curve shows the inverse relationship between the price level and the total…

Q: In the AS/AD model, what are the main differences between the neoclassical perspective and the…

A: AD / AS, the model can be used to illustrate both the Say's law and the Keynes law.  Say's Law…

Q: importance of AD/AS models from a macroeconomic standpoint

A: Macroeconomics is that branch of economics that studies the aggregates of the economy such as…

Q: Policymakers who can influence AD cannot offset the adverse effects of a recession due to a fall in…

A: Aggregate supply is a macroeconomic variable, where the supply component is addressed. It includes…

Q: Do you believe that the Hayek’s classical AD-AS model explain the factors that cause changes…

A: 1.2 The Hayek’s classical model illustrates the aggregate supply curve as a vertical straight line…

Q: Empirical studies indicate that the long-run trend in real GDP of the USA has an upward trend. How…

A: Introduction In the long run, real GDP in the United States is rising, but short-term volatility is…

Q: LRAS ADn SRAS ADi Pn En Neoclassical zone ADk Ei Pi Intermediate zone Pk Ek Keynesian zone Yk Yi Yn…

A: Say's law: Say's law was named after the famous french economist "jean- Baptiste say" who was a…

Q: How does the classical business cycle analysis change the IS-LM model to make it different from a…

A: There are different schools of economic thought. Each school differs from the other in terms of…

Q: How could the static AD-AS model be used to show how the job keeper scheme could of sustain our…

A: The job keeper scheme is to support businesses and not-for-profit organizations significantly…

Q: How is the natural rate of unemployment illustrated in an AD/AS model?

A: The natural rate of unemployment depicts the lowest rate of unemployment whereby there is either…

Q: What would the LM curve look like in a classical world? If this really were the LM curve that  we…

A: Economics as a subject deals with the allocation of scarce resources among humans with unlimited…

Q: Now think about a major recession, like the one that occurred in 1982. (Hint: a major recession…

A: A recession is caused when the economy is operating below the potential output level. It is a…

Q: In a recent press conference of the Federal Reserve of the United States2 , Chairman Powellincluded…

A: Because it provides Associate in Nursing overall framework for swing economic elements along in one…

Q: Contrast Say’s law with Keynes Law, do they provide completely different interpretations of…

A: Say and Keynes provide different interpretation of macroeconomic behavior. Keynes interpretation…

Q: Hayek says that markets will heal themselves and that government should not intervene. How does the…

A:

Q: Empirical studies indicate that the long-run trend in real GDP of the USA has an upward trend. How…

A: GDP refers to the goods and services produced in the economy at a given period of time.  GDP is used…

Q: Price Level on AS/AD model can best be described as a: a. GDP deflator (inflation) b. The prices…

A: In the AD-AS model, it can be seen that the aggregate demand curve shows the demand for total output…

Inflation and Purchasing Power Theory

In economic terms, Inflation refers to the increase in the costs of various commodities which are used in daily lifestyle like food, clothes, transport, etc. over a specific time. It may lead to a fall in the purchasing power of the people and also affects the exchange rate of the currency because of the price increase. As the purchasing power falls the unit of the currency in the economy falls. When the prices of the commodities are decreased, then the purchasing power of the consumers will rise, then it will lead to deflation and changes the currency of the base economy to that of the foreign economy which will lead to change in exchange rates.