Explain and draw a graph to illustrate how a depreciation of the U.S. dollar changes the short-run equilibrium real GDP and price level in the United States.
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Explain and draw a graph to illustrate how a
Explain and draw a graph to illustrate how a depreciation of the U.S. dollar changes the short-run equilibrium real
Explain and draw a graph to illustrate how a depreciation
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- The Focus box “Can a Budget Deficit Reduction Lead to an Output Expansion? Ireland in the 1980s” provides an example of fiscal consolidation. Ireland had a large budget deficit in 1981 and 1982. What does a deficit reduction imply for the medium run and the long run? What are the advantages of reducing the deficit?1. Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now in a recession. a. Using a correctly labeled graph of the long run aggregate supply, short run aggregate supply, and aggregate demand curves and show each of the following: i. Current price level, labeled PL1 ii. Current output, labelled Y1 b. Assume that Braveland, a major trading partner of Macroland, enters into a recession. i. Explain the effect on Macroland exports to Bravelandii. On your graph in part (a) above, show the effect of the change identified in part (b) (i) above on real output in Macroland. iii. How would this change in real output in Macroland affect unemployment in Macroland?1. Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now in a recession. a. Using a correctly labeled graph of the long run aggregate supply, short run aggregate supply, and aggregate demand curves and show each of the following: i. Current price level, labeled PL1 ii. Current output, labelled Y1 b. Assume that Braveland, a major trading partner of Macroland, enters into a recession. i. Explain the effect on Macroland exports to Braveland ii. On your graph in part (a) above, show the effect of the change identified in part (b) (i) above on real output in Macroland. iii. How would this change in real output in Macroland affect unemployment in Macroland? c. Assume the recession in Braveland causes a decrease in the demand for Macroland dollars in the foreign exchange market. Braveland’s currency is the euro. i. Explain whether the euro will appreciate, depreciate, or remain unchanged against the dollar.ii. Draw a correctly labeled graph of…
- Question 27 The slope of a long-run aggregate supply curve is vertical, because full-employment output depends directly on the price level. vertical, because full-employment output is independent of the price level. horizontal, because full-employment output is independent of the price level. upward sloping, because as the price level rises, firms will increase output. upward sloping, because rising prices reduce real wealth and spending. Question 28 Supposed you are offered a job with Amazon upon graduation. Your starting salary will be $70,000 which will put you in the 22% federal income tax bracket. The total amount of income taxes you pay is $11,285.50. Your average tax rate is approximately ______. 25.0% 16.1% 21.3% 13.3% 11.5% Question 30 The largest portion of the federal budget is…In September the UK Government under the leadership of new Prime Minister Liz Truss announced a set of policies including: ^r. cuts to income tax rates 2. a commitment to billions of pounds of government subsidies for household energy bills. The UK has an inflation rate that is above their target rate and the UK Government is currently running a budget deficit. How these policies would be funded was not specified. Immediately after the announcement of these policies, investors started selling off UK pound assets as the market reacted badly to this announcement. Discuss these policies and their impact on economic variables. There is no single right answer here. Better answers will show depth of good economic analysis of these policies. Diagrams are not required.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
- Suppose there is an international recession hits the US economy, what is the long-run equilibrium will look like? What changes in the U.S GDP? Does it affect to the long run aggregate supply and short run aggregate supply?An appreciation of the US dollar would make US exports more expensive overseas and foreign goods cheaper in the US, resulting in a decline in the US aggregate demand. True FalseIn the foreign exchange market, value of the dollar has fallen. Simultaneously, businesses are feeling hesitant to undertake new real investment (“animal spirits” are down) and households are nervous about the future (Consumer Confidence Index is down) and are cutting back on consumption while they save more. What happens to the Aggregate Demand and Aggregate Supply curves of the U.S.? 1. Aggregate Supply does not change. AD has two opposing effects: exports rise due to the fall in the dollar, and both investment and consumption fall. It is not clear which effect is stronger. AD can move either to the left or to the right. 2.Aggregate Supply does not change. AD has two effects on it. Exports fall due to the fall in the dollar, and both investment and consumption also fall. AE falls and AD shifts to the left. 3.Aggregate Supply does not change. AD has two effects on it. Exports rise due to the fall in the dollar, and both investment and consumption also fall. AE falls and…
- Myanmar experienced a 60 percent currency dropped within four weeks as the economy tanks since early of this year. This is due to the country facing a military coup since February 2021, which has led to political instability and the second wave of coronavirus infections in the country. The World Bank predicted the economy would slump 18 percent, which lead to the employment contraction and an increase in the number of poor. As an economist, analyze the fiscal and monetary policy tools that can be implemented to overcome the recession in Myanmar.If speculators bid up the value of the U.S. dollar in the market for foreign exchange, then U.S. goods become more expensive relative to foreign goods so aggregate demand shifts right. U.S. goods become less expensive relative to foreign goods so aggregate demand shifts right. U.S. goods become more expensive relative to foreign goods so aggregate demand shifts left. U.S. goods become less expensive relative to foreign goods so aggregate demand shifts left.If C = 300 billion and I = 150 billion find the aggregate demand in a two sector economy