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(Supply Shocks) Give an example of an adverse supply shock and illustrate graphically. Now do the same for a beneficial supply shock.
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- 10-4 Summarize what can shift an economy’s potential output in the long run (Supply Shocks) Give an example of an adverse supply shock and illustrate graphically. Now do the same for a beneficial supply shock.Specific Subject: Macroeconomics - AD and AS Shocks Analyse the case of a negative supply shock caused by an increase in oil prices and compare with the shock caused by the Covid pandemic and answer next questions: Explain what would be the similarities and differences between the two shocks? Graph and explain what would be the effect of an expansionary economic policy (increase in aggregate demand)? Graph and explain what measures or government intervention would be most appropriate to deal with both types of shocks? Graph and compare the adjustment in both cases with and without government intervention. Please, I need just the answer of question N. 4. The others questions were answered by expert tutors already.QUESTION 10 A recession is a period during which aggregate output increases. True False
- Specific subject - Macroeconomic Analyse the case of a negative supply shock caused by an increase in oil prices and compare with the shock caused by the Covid pandemic. What would be the similarities and differences between the two shocks? What would be the effect of an expansionary economic policy (increase in aggregate demand)? Graph What measures or government intervention would be most appropriate to deal with both types of shocks? Graph Compare the adjustment in both cases with and without government intervention. GraphGlobal economy is facing lots of uncertainties due to the pandemic and the recent war. Pick one industry that you are interested in and explain how vulnerable this industry is to potential economic downturns. Please also argue why you think so. Please illustrate your discussions with exampleDescribe the economic effects of the current pandemic. How would it affect the Aggregate Demand and Aggregate Supply graph? What are some of the global aspects of the situation?
- Give an example of a favourable shock to aggregate supply (1) B) Use the model of aggregate demand and aggregate supply to explain the effects of this shock with the help of a suitable diagram. (2+2)9-)Suppose that government decides to support the firms for their investments in research and the development.Assuming this support increases productivity in the economy, use aggregate demand and supply analysis to predict the short-run and long-run effects on inflation and output. Show these effects on a graph and explain the results in detail. IMPORTANT NOTE FOR THE QUESTION: DESCRIPTION ≠ EXPLANATION; So please DO NOT just write like “this curve shifts right or left etc.” as an explanation (I can see it on the graph), EXPLAIN “WHY” that curve shifts right or left and clearly write “WHAT” are the short-run and the long-run RESULTS of the shift(s) on inflation and output.)Give an example of a demand shock and a supply shock and show how it may push output and employment away from their natural levels. Include a graph.
- 6 What is a supply shock and why might it lead to stagflation? Explain & Provide an example using an aggregate supply & aggregate demand graph .Give typing answer with explanation and conclusion A beneficial supply shock is: Question 6 options: A shift down and to the left of the aggregate demand curve, leading to a fall in the price level and a decline in output and employment. A shift down and to the right of the aggregate supply curve, leading to a fall in the price level and a rise in output and employment. A shift in and to the left of both the aggregate supply and aggregate demand curves, leading to a decline in output and employment. A shift up and to the left of the aggregate supply curve, leading to a rise in the price level and a decline in output and employment. None of the statements are correct.What may happen if growth in China continues or contracts?
