Confused and not sure what's correct In the year 2020, aggregate demand and aggregate supply in the fictional country of Marjan arerepresented by the curves AD2020and AS on the following graph.Suppose Natural Real GDP in this economy is $6 trillion.On the following graph, use the green line (triangle symbol) to plot the long-run aggregate supply(LRAS) curve for this economy.108106105亞PRICE LEVEL1031021011000ABIADI2020SRAS2468REAL GDP (Trillions of dollars)10ADAD12B1416-AEconomists have forecast that if the government does nothing and the economy continues to growat the current rate, aggregate demand in 2021 will be given by the ADA curve, resulting in theoutcome illustrated by point A. If the government pursues an expansionary policy, aggregatedemand in 2021 will be given by the ADB curve, resulting in the outcome illustrated by point B.7LRASThe following table gives projections for the unemployment rates that would occur at point A andpoint B. Consider what the rate of inflation would be between 2020 and 2021, depending onwhether the economy moves from the initial price level of 102 to the price level at outcome A orthe price level at outcome B.Outcome CComplete the table by entering the inflation rate at each potential outcome point.Note: Calculate the inflation rate to two decimal points of precision.Unemployment Rate Inflation Rate6%%3%%Use the following graph to help you answer the questions that follow. (Note: You will not begraded for any adjustments made to this graph.) Use the following graph to help you answer the questions that follow. (Note: You will not begraded for any adjustments made to this graph.)INFLATION RATE (Percent)O02UNEMPLOYMENT RATE (Percent)1BSRPCThis line is2021ABased on your answers to the previous questions, use the black line (plus symbol) to draw theshort-run Phillips curve for this economy in 2021 (SRPC202).The short-run Phillips curve isLRPCline:Representing the tradeoff between unemployment and inflationAt Natural Real GDPAt the natural rate of unemploymentline:Now consider the long-run effects of this policy. Suppose, in particular, that followingimplementation of the policy, the aggregate demand curve remains at ADB. Designate the long-runequilibrium that would follow such a policy as outcome C.Going back to the first graph, place the grey point (star symbol) at outcome C.Because output at point C isassociated with outcome C isFinally, use the green line (triangle symbol) to draw the long-run Phillips curve (LRPC) on thesecond graph.Natural Real GDP, the unemployment ratethe natural rate of unemployment.Representing the tradeoff between unemployment and inflationAt the natural rate of unemploymentAt Natural Real GDP

According to the Phillips curve, unemployment and inflation have a steady inverse connection. The…

In the year 2020, aggregate demand and aggregate supply in the fictional country of Marjan are represented by the curves AD2020and AS on the following graph. Suppose Natural Real GDP in this economy is $6 trillion. On the following graph, use the green line (triangle symbol) to plot the long-run aggregate supply (LRAS) curve for this economy. PRICE LEVEL 107 103 102 101 100 O AD 2020 A B SRAS 2 4 6 8 REAL GDP (Trillions of dollars) 10 AD AD 6% 3% 12 B 14 Economists have forecast that if the government does nothing and the economy continues to grow at the current rate, aggregate demand in 2021 will be given by the ADA curve, resulting in the outcome illustrated by point A. If the government pursues an expansionary policy, aggregate demand in 2021 will be given by the ADB curve, resulting in the outcome illustrated by point B. LRAS The following table gives projections for the unemployment rates that would occur at point A and point B. Consider what the rate of inflation would be between 2020 and 2021, depending on whether the economy moves from the initial price level of 102 to the price level at outcome A or the price level at outcome B. Outcome C Complete the table by entering the inflation rate at each potential outcome point. Note: Calculate the inflation rate to two decimal points of precision. Unemployment Rate Inflation Rate % % Use the following graph to help you answer the questions that follow. (Note: You will not be graded for any adjustments made to this graph.)

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter20: Aggregate Demand And Supply

Section: Chapter Questions

Problem 8SQP