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- Know key terms: Explain in your own words (not google) the following:-LRAS-Aggregate Demand-Aggregate Demand CurveEvaluate the following statements using relevant diagrams and provide detailedexplanations. The statements describe events that might shift aggregate demand (AD),aggregate supply (AS), both or neither. Clearly label your diagrams. A) A recent economic report suggests that consumer confidence has increased.B) Apple Inc. has announced a 50% discount on its new generation iPad devices foruniversity students.C) After a prolonged acceleration in economic activity, the government raises the rateof personal income tax.D) A continuing economic expansion has drawn in many working age people (andtheir families) from neighbouring countries in search of jobs and better lives.suppose that at a price index of 154 the quantity demand of u.s. real GDP is 10.0 trillion worth of goods. do these data represent aggregate demand or point on an aggregate demand curve? explain your answer?
- Given the Aggregate demand function of US AD= 5000 + 0.7Yd. Interpret this equation and diagramatically express the equilibrium output.Q.No.1. Differentiate the following by giving at least one practical exampleAggregate demand Vs Aggregate supplyExplain whether each of the following events shiftsthe short-run aggregate-supply curve, the aggregatedemand curve, both, or neither. For each event thatdoes shift a curve, draw a diagram to illustrate theeffect on the economy.a. Households decide to save a larger share of theirincome.b. Florida orange groves suffer a prolonged period ofbelow-freezing temperatures.c. Increased job opportunities overseas cause manypeople to leave the country.
- define Aggregate Demand, give a couple of examlples tied to todays current events (a couple paragraphs)Explain the macroeconomics in the context of following;a. Aggregate supply and demandb. Shifts in the aggregate demand curvec. Inflation - causesAD-AS (aggregate demand/supply) Changes What things cause aggregate demand to shift? Why does each cause AD to shift? What things cause SRAS (short run aggregate supply) to shift What things cause LRAS (long run aggregate supply) to shift What graph/model does this relate to?
- Figure 1: Hayek’s (Classical) AD-AS Model Economics Online. (n.d.). Aggregate Demand. Retrieved from http://economicsonline.co.uk/Managing_the_economy/Aggregate_demand.html Hayek 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? Figure 2: Keynes’s AD-AS Model Economics Online. (n.d.). Aggregate supply. Retrieved from http://www.economicsonline.co.uk/Managing_the_economy/Aggregate+supply.html 2.1. In Figure 2 above, what are the factors that may cause the aggregate demand to shift from AD to AD1? What is the difference between demand pull inflation, cost push inflation and recession? 2.2. In macroeconomics, the immediate short run is known as a length…Determine whether each of the following would cause a shift in the aggregate demand curve , A shift in the aggregate supply curve, neither, or both. Which curve shifts and which direction? What happens to the aggregate output and the price levels in each case? A the price level changes. Be consumer confidence to clients. See the supply resources increase. D wage rate increases.A change in the price level produces a ________ the aggregate demand curve. i. shift in ii. change in the slope of iii. movement along Question 2Answer a. i only b. iii only c. i and ii d. i and iii e. ii only