Notice the major differences between our Keynesian Cross (in your chapter 9 appendix) and the Macro Equilibrium (AS and AD) diagram? Which model has more to offer in which situations?
Q: 9. Scarcity means
A: To find: What is meaning of scarcity.
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A: To find : What is income effect for inferior commodities.
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A:
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A: Supply Curve: - supply curve is the graphical way of showing the relationship between the quantity s...
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Q: :0. Economic survey is published by
A: To find : Who publish economic survey.
Q: 2. Under law of demand Drice of commodity is an
A: To find : Which comes under law of demand.
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- Comparing ModelsWhat are the differences between our Keynesian Cross and the Macro Equilibrium (AS and AD) diagram? Which model has more to offer?Y5 Consider an AS-AD model for the U.S. Suppose an economic expansion in Mexico increases income for the average Mexican household. Mexico is a large trading partner with the US. This expansion would cause: a. the U.S. price level to rise and real GDP to fall. b. the U.S. price level and real GDP to increase. c. the U.S. price level to fall and real GDP to rise. d. the U.S. price level and real GDP to fall.Identify four macroeconomic issues that are essential tounderstanding the behavior of the economy.
- Linear stages theory, Structural-change model (Lewis two-sector model), International dependence/dominance model, Neoclassical model How do the contemporary models differ from the previous models? Coordination failures ComplementarityWhy do these models emphasize multiple equilibria and what does it mean?What problems may prevent economy from moving from a bad equilibrium to a stable one?Need to understand that graphWhat are the big push and O-ring theories (important to have a broad or general understanding ofthe two theories?)Changes in macroeconomic indicators can often be of relevance to business decision-making. For instance, changes in macroeconomic performance reflected in indicators can impact things such as firms profit forecasts, expected sales growth, expansion plans, etc.Assume you are employed as a business analyst with the large Australian based mining company. Identify and discuss how each of thefollowing macroeconomic issues may be relevant to the firm:a) A world-wide economic slow-down.b) Appreciation of the Australian dollar relative to other major currencies.c) The government abolishes subsidies to the mining industry.South Korea, Japan, and China are the major buyers of Qatar’s natural gas. During the COVID-19 pandemic, these counties suffered from a sharp reduction in economic growth rates. Based on our discussion of chapters 9 and 10, Use the AD and AS macroeconomic equilibrium model to show, graphically, the short run and long run impact of the low economic rates in South Korea, Japan, and China on the macroeconomic equilibrium in the Qatari’s economy (Ceteris Paribus). Assume that Qatar’s economy was initially operating at the potential level of GDP and there is no government or central bank intervention. Briefly explain
- Explain, using the AD‐AS model, how the South African Government can usefiscal policy as a tool to recover from the negative effects of this COVID‐19pandemic.Using the dynamic AD/AS model, explain why Kennedy is concerned about the state of the global economy.Assume that an economy prefers an internal balance (Y = Y) to an external balance (NX = 0). Then the only aim of the economy is to keep the equilibrium output level at the level of potential output (Yf= 1500 units). Suppose that the IS and BP models for this economy are as the following. Please the the attached photo
- Discuss how the current concerns regarding the Coronavirus factor into the GDP dynamic. What are the implications for various segments of the macro economy and the existing international trade regime?Consider the intertemporal model with two time periods. Home is a small open economy thatcan borrow and lend in the first period at a fixed world real interest rate of r* = 4%. In thefirst period output is Q0 = 800. Because of a recession, output in the second period output isexpected to fall to Q1 = 500. The country wants to smooth consumption as much as possible.The country begins with no external assets or liabilities. Finally, assume that the intertemporalutility function at home isu(c0) + βu(c1)where β = 1/1+r*u is concave (i.e. consumers are risk averse and want to smooth consumption).(a) Solve for consumption, the current account, and financial account in the first period (t = 0).(b) Solve for the trade balance, current account, and financial account in the second period(t = 1).(c) Would Home be better off or worse off if the world interest rate is 1% instead of 4%?Explain using the appropriate equations.AD/AS model. Country A is an oil exporting country. The aggregate demand and supply functions are given as below: AD : Y = 710 − 30P + 5G+3Poil AS : Y = 10 + 5P − 2Poil where Y is real GDP, P is the price level, G is the government purchases, and Poil is the world price of oil. Write down the equilibrium condition. Solve for the equilibrium value of real GDP and the price level (hint: take G and Poil as known variables). Draw the AD/AS graph to show when Poil rises in the world market, what will happen the AD and SAS curves. Explain the price level effect and the output effect due to the change of the oil price.