In the space provided below, you are asked to follow a series of instructions: 1. In a carefully labelled diagram, draw an economic equilibrium in the classical range of the aggregate supply curve.
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- Suppose our economy is in macroeconomic equilibrium (also called "general equilibrium") with an upward-sloping aggregate supply curve and a downward-sloping aggregate demand curve. An increase in aggregate demand will: Question 5 options: a) Increase aggregate supply. b) Decrease the price level. c) Causes the aggregate supply to shift to the right. d) Increase real GDP. e) Reduce the number of discouraged workers in the unemployment rate.why is the answer ia A When a market is not in equilibrium a. government intervention is required to achieve equilibrium. b. consumers will organize into special interest groups to promote their agenda. c. firms will increase contributions to political action committees. d. the economic motives of sellers and buyers will move the market to its equilibrium. e. it will simply stay in a state of disequilibrium.Suppose we have two consumers in the market. Joe has the following demand curve: P=10-Q1. Lucy has the following demand curve: P=10-3Q2. Find (algebraically) the formula for the market (or aggregate) demand curve. Draw all 3 curves on 3 separate graphs that should be drawn next to each other (so I can see the horizontal summation of quantities).
- A stock market bust leads to a decrease in wealth in the economy. What happens to equilibrium price and RGDP in the economy? 1) Equilibrium price and equilibrium RGDP increase. 2) Equilibrium price and equilibrium RGDP decrease. 3) Equilibrium price will rise and equilibrium RGDP will fall. 4) Equilibrium price will fall and equilibrium RGDP will rise.RM3. Quantity demanded is Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a the willingness to pay for the marginal unit. b the amount that an individual demands at a particular price level. c always combined with price levels. d all of the above are correct Which of the following would be most likely to increase consumption spending? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a A reduction in consumer credit card debt b A drop in stock prices c A higher interest rate d The expectation of lower future pricesQuestion 2 How would you define price stickiness? How does this phenomenon lead to an increase in the short run level of output according to the Keynesians? Comment
- Is the following statement true or false: The decrease of transfers to firms shifts the curve of the aggregate supply to the left.Suppose a state aims to make it easier for people to purchase school supplies for children by exempting these purchases from sales taxes. Such programs are often called "sales tax holidays." Identify which of the following would be considered an unintended consequence of this policy.Choose one: A. An increase in purchases just prior to and immediately following the sales tax holiday. B. An increase in prices by retailers expecting higher demand during the sales tax holiday. C. A large increase in net sales. D. A steep decline in sales during the sales tax holiday.The uncertainty surrounding the COVID-19 pandemic led firms to reduce their desired investment in 2020. What are the short-run and long run effects on the equilibrium price and output levels? Please explain in words.
- Average Tax Rate Tax Revenue ($B) 20% $250 40 300 60 250 80 200 Refer to the table. If the current tax rate is 60 percent, supply-side economists would advocate Multiple Choice lowering tax rates to 20 percent, or lower if possible. lowering tax rates to 40 percent. keeping tax rates at 60 percent. raising tax rates to 80 percent.Consider the following short-run, closed economy model of the economy. Goods Market C = 50 + 0.5(Y – T) I = 150 – 10r ; NX = -200 G = 150 ; T = 100 Money Market M = 20,000 P = 100 L(Y, r) = Y – 50r 1. Find the equilibrium values of r and y. *** This has been answered*** Goods Market = 600 - 20r Money Market = 200 + 50r equilibrium value of r = 5.71; Y = 485.8 Policymakers plan to balance the budget by decreasing G. What is the size of the Keynesian-Cross government spending multiplier and the horizontal shift of the IS curve? What are the resulting IS-LM equilibrium values of r and Y after the shift? What is the size of the effective (actual) government spending multiplier? Why is it smaller?Classical economists think prices and quantities respond to supply and demand and the economy produces its potential output over time. However, Keynesian economists believe pricing and wage rigidities may lower the economy's long-term equilibrium output. What is the Price-wage rigidity?