In the AD/AS model, if both inflationary expectations and business taxes increase, then the price level ___ and actual real GDP ___ and employment ___.
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In the AD/AS model, if both inflationary expectations and business taxes increase, then the
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- Using the AD/AS model, show how fear of a recession is expected to affect an economy experiencing too much inflationUsing the AD-AS model, if consumers and business become more optimistic about the future direction of the economy and increase spending, then: a-long-run aggregate supply will decrease. b-aggregate demand will decrease. c-aggregate demand will increase. d-long-run aggregate supply will increase."Tax cuts are more effective in generating the economy when the economy is in recession compared to at full employment." True or False? Show and explain your answer based on the AD-AS model.
- question 1: In Figure 1 , how does the AD-AS model reflect the idea that governments cannot increase real GDP beyond an economy’s equilibrium level that the free-market economy is able to produce? Explain your answer.During 2000, there was a sharp reduction in stock prices and a sharp increase in the world price of crude oil. How will aggregate demand and aggregate supply in the United States be influenced by these two factors? Using the AD-AS model, explain the expected impact on output.The Keynesian view of the AD/AS model states that when beginning from potential output equilibrium, any increase in AD will :
- In a Keynesian economy, please show and explain how would reducing marginal tax rates affect income and price levels in the name of AD-AS model.In the AD/AS model, what prevents the economy from achieving equilibrium at potential output?A leftward shift in the AD curve might be caused by which of the following? falling price expectations the interest rate effect a reduction in the money supply falling wage costs
- Explain the fiscal and monetary policy used in the attached document using IS model and the AD modelHayek says that markets will heal themselves and that government should not intervene. How does the AD-AS model reflect Hayek’s idea that governments cannot increase real GDP beyond the level that the free market economy is able to produce? Do you believe that the Hayek’s classical AD-AS model explain the factors that cause changes (shifts) in AS realistically? Why or why not?Hayek says that markets will heal themselves and that government should not intervene. How does the AD-AS model reflect Hayeks idea that governments cannot increase real GDP beyond the level that the free market economy is able to produce?