“John Maynard Keynes introduced the AD-AS macroeconomic model (aggregate demand- aggregate supply) to determine the equilibrium level of real output and the level of prices in the economy” 1. Draw a diagram with aggregate demand, short-run aggregate supply, and long-run aggregate supply.  2. Discuss the reasons why the aggregate demand curve is downward sloping, while the short-run aggregate-supply curve is upward sloping?

Q: The table below shows the initial aggregate demand, short-run, and long-run aggregate supply…

A: In the figure below, the given introductory aggregate demand (AD), short-run aggregate supply (AS),…

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A: The three factors that can change economy’s potential output 1. Expansion in innovation and hence…

Q: A) Suppose the economy is in full employment and that people start using cash less frequently in…

A: Answer -   IS-LM :- IS-LM is a model help evaluate overall economic activity. As IS deals with the…

Q: e graph below shows the AD-AS diagram for Spain. All numbers are in billions. 100+ 000 AD 006 800…

A: In an economy, potential GDP is considered as the level of output that is estimated by the…

Q: Price Level 50 75 Aggregate Demanded (AD) Aggregate Supplied (AS) $3,500 $1,000 3,000 2,000 100…

A: Aggregate demand shows an inverse relationship between price level and real GDP. It slopes downward.…

Q: O Assume that the United States economy is currently in long-run equilibrium. a) Draw a correctly…

A: Economy is already at full employment level . Under this situation where natural rate of…

Q: you want, you can) TO MAKE EXPLANATION IS SO İMPORTANT.NOTE THAT: DESCRIPTION ≠

A: Aggregate supply or total output is the total supply of services and goods being produced at a given…

Q: 7. The long-run aggregate supply curve and short-run adjustments The following graph shows an…

A: The natural real GDP results from the economy producing output while utilizing its resources to…

Q: End of Chapter 3.5a Ques The graph shows the economy in long-run equilibrium at point A. LRAS, SRAS,…

A: Long-run aggregate supply (LRAS):LRAS is a curve showing the relationship between the price level…

Q: Use an aggregate demand (AD) and aggregate supply (AS) model to respond to the following questions.…

A: please find the answer below.

Q: The aggregate demand and aggregate supply model is a useful simplification of the macroeconomy used…

A: [a] In a 2-D graph, x-axis or the horizontal one explains the dependent variable whereas y-axis or…

Q: Graphically illustrate the long-run aggregate supply curve.

A: Long-run aggregate supply (LRAS) shows the total planned output when the price level changes. LRAS…

Q: 2. Please use a graph to produce aggregate supply in classical model under the assumption of nominal…

A: Before the Great Depression, the Classical Model was popular. It claims that the economy is very…

Q: 8. Economic fluctuations I The following graph shows the economy in long-run equilibrium at the…

A: The aggregate demand (AD) shows the negative relation between the quantity demand and price level.…

Q: 24. Firas a university student, trying to convince his colleague Bilal that the aggregate demand…

A: "Aggregate demand represents the total demand for all finished goods and services produced in an…

Q: Now suppose that a boom in stock market causes aggregate demand to rise. Use your diagram to show…

A: Hey, thank you for the question. Since there are multiple questions posted, we will answer first…

Q: 13. Suppose the economy is in a long-run equilibrium. a. Use the AD-AS model to graphically depict…

A: Dear student, you have asked multiple sub-part questions in a single post.In such a case, as per the…

Q: Use the following information to answer questions 5 through 7: The graph below shows the AD-AS…

A: The natural rate of unemployment is the unemployment where the potential gross domestic product is…

Q: The graphs illustrate an initial equilibrium for the economy. Suppose that the government increases…

A: In short run the price level and GDP increase. In long run the price level would increase, but GDP…

Q: The following table presents information on average price level and output (Real GDP) for Nickeltown…

A: Aggregate Demand (AD) curve is downward sloping (negative slope) because there is an inverse…

Q: The following graphs show the state of an economy that is currently in Tong-run equilibrium. The…

A: Long Run Aggregate Supply function depicts the changes in output as a function of changes in prices…

Q: The economy starts out on the curves AD, and SAS, Suppose that people expect deflation (a falling…

A: Aggregate demand: It is the sum total of the final value of all the goods and services that have…

Q: 2.3. In macroeconomics, the immediate short run is known as a length of time when both input prices…

A: When the aggregate demand curve AD shifts from AD to AD2, the economy will still at full employment…

Q: reate a graph for a short-run aggregate supply curve. Use the variable ‘Price Level’ for the…

A: The supply curve graphically represents the supply schedule and it shows that if the price level…

Q: The economy of Ficticiousland has demand and supply schedules as follow: Price Level (CPI)…

A: We are going to solve for the equilibrium output and price level using algebraic notions and…

Q: 4. Show and explain the Keynesian and classical aggregate supply curves graphically. How does the…

A: Answer: Introduction: Aggregate supply curve: it shows the relationship between the amount of output…

Q: 4 In Bangladesh, we are expecting that the price of food items will increase after a few weeks in…

A: Demand and supply are two important concepts in economics used to determine the equilibrium price…

Q: 20 The following graph shows the short-run aggregate supply curve (AS), the aggregate demand curve…

A: In the long run, equilibrium remains at full employment and output is equal to natural rate of…

Q: the diagram, answer the following questions. a) Is the economy facing an inflationary or…

A: a. From the diagram,it could be observed that the economy is facing a recessionary gap because Y1 is…

Q: The following events shift either aggregate demand, aggregate supply, both or neither. Jsing a…

A: Demand and supply depict the relationship between the quantity that consumers wish to buy and the…

Q: Hayek says that markets will heal themselves and that government should not intervene. How does the…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: Suppose an economy is in long-run equilibrium.a.Use the model of aggregate demand and aggregate…

A: (a) The aggregate demand curve represents the relationship between the price level prevailing in the…

Q: Write the definition of Macroeconomics with example? 2. Describe the concept of aggregate demand and…

A: Macroeconomics is the study of large population as one. Example, Income of a country, i.e., GDP

Q: ng government policies will move the economy from one long-run macroeconomic equilibrium to another.…

A: a. Increase in taxes is a consequence of a contractionary fiscal policy which would lead to fall in…

Q: Figure 2: Keynes’s AD-AS Model Economics Online. (n.d.). Aggregate supply. Retrieved from…

A: Aggregate demand is the demand for all the finished goods and services in the economy. The equation…

Q: 8. Economic fluctuations I The following graph shows the economy in long-run equilibrium at the…

A: Aggregate demand is a sum of consumption spending, investment spending, government purchases and net…

Q: VERTICAL AXIS AS AD HORIZONTAL AXIS The vertical axis of the aggregate demand and aggregate supply…

A: vertical axis of aggregate demand and aggregate supply model measure the overall      price level…

Q: 1) Use an aggregate demand (AD) and aggregate supply (AS) model for each question to respond to the…

A: Economic Output The amount of products and services produced in a specific period is the "output" in…

Q: Attached: figure 1: Hayek’s (Classical) AD-AS Model Question 1  Why does Hayek’s aggregate supply…

A: 1.In the economic model such as the one explained by Hayek, there will be a vertical supply curve in…

Q: 3. What is the difference between the long-run aggregate supply (LRAS) and the short-run aggregate…

A: Aggregate demand curve shows the total quantity of goods demanded by the consumer , investor ,…

Q: 3. Using aggregate demand and aggregate supply analysis, show the effects of the following (Assume…

A: Aggregate demand refers to the entire quantity of demand for all completed products and services…

Q: 4.2 List and discuss two (2) reasons for the downward sloping shape of the aggregate demand curve.

A: Please find the answer below.   DOWNWARD SLOPING DEMAND CURVE: The downward sloping of the curve…

Q: Decide if the following events are Micro, shifting supply or demand, or Macro, shifting AD or AS.…

A: 1)Shifting supply rightwards. 2)Macro 3)Demand shifts leftwards. 4)Demand shifts rightwards.…

Q: 2.3. In macroeconomics, the immediate short run is known as a length of time when both input prices…

A: In the immediate short run, when the AD falls from AD to AD2, the price level, and the output level…

Q: un aggregate supply, and long-run aggregate supply curves, explain the process by which each of the…

A: a. A decrease in wealth of households would lead to a reduction in consumer spending. At E1 being…