Price level (GDP price level, 2005 = 100) 116- 112- Potential GDP AS 108- 104 100- 96- 92- 88- AD 84- 80- 530 540 550 560 Real GDP (trillions of 2005 yen) 570 580 >>> Draw only the objects specified in the questiorn The graph shows the Japanese economy at the beginning of 2010 Draw an aggregate demand curve that is consistent with a falling unemployment rate Label it AD, Draw an aggregate supply curve that corresponds to the price level falling and the economy still remaining in a recessionary gap Draw a point at the new macroeconomic equilibrium Click to enlarge graph The economic recovery will occur and deflation will ease if OA aggregate demand increase faster than aggregate supply increases OB. aggregate supply increases faster than aggregate demand increases OC. aggregate supply decreases with no change in aggregate demand O D. aggregate demand decreases with no change on aggregate supply

Price level (GDP price level, 2005 = 100) 116- 112- Potential GDP AS 108- 104 100- 96- 92- 88- AD 84- 80- 530 540 550 560 Real GDP (trillions of 2005 yen) 570 580 >>> Draw only the objects specified in the questiorn The graph shows the Japanese economy at the beginning of 2010 Draw an aggregate demand curve that is consistent with a falling unemployment rate Label it AD, Draw an aggregate supply curve that corresponds to the price level falling and the economy still remaining in a recessionary gap Draw a point at the new macroeconomic equilibrium Click to enlarge graph The economic recovery will occur and deflation will ease if OA aggregate demand increase faster than aggregate supply increases OB. aggregate supply increases faster than aggregate demand increases OC. aggregate supply decreases with no change in aggregate demand O D. aggregate demand decreases with no change on aggregate supply

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Given the Aggregate demand function of US AD= 5000 + 0.7Yd. Interpret this equation and diagramatically express the equilibrium output.
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Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now in a recession. Using a correctly labeled graph of the long run aggregate supply, short run aggregate supply, and aggregate demand curves and show each of the following: Current price level, labeled PL1 Current output, labelled Y1 Assume that Braveland, a major trading partner of Macroland, enters into a recession. Explain the effect on Macroland exports to Braveland On your graph in part (a) above, show the effect of the change identified in part (b) (i) above on real output in Macroland. How would this change in real output in Macroland affect unemployment in Macroland? Assume the recession in Braveland causes a decrease in the demand for Macroland dollars in the foreign exchange market. Braveland’s currency is the euro. Explain whether the euro will appreciate, depreciate, or remain…
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1-What is the general relationship between a country's price level and the quantitiy of it's domestic output (Real GDP) demanded? Who are the buyers of real US GDP? 2- what assumptions cause the immediate -short-run aggregate supply curve to be horizontal? why is the long-run aggregate supply curve vertical? Explain the shape of the short-run aggregate supply curve . Why is the short-run curve relatively flat to the left of the full employment output and relatively steep to the right ? 3- why does a reduction in aggregate demand tend to reduce real output, rather than the price level? 4- Explain" unemployment can be caused by a decrease of aggregate demand or a decrease of aggregate supply ."In each case , specify the price level outcomes . 5- In early 2001 investment spending declined in the USA. In the 2 months follwing september , 11 2001 attacks on the US, consumption also declined . Use Ad-AS analysis to show the two impacts on Real GDP. 6- Using the concept of the multiplier ,…