Suppose that A Explain the reasons that might lead to an increase in A and show graphically the short and long-run impact of such a change. Make sure to clearly explain your reasoning.
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- Suppose that A Explain the reasons that might lead to an increase in A and show graphically the short and long-run impact of such a change. Make sure to clearly explain your reasoning.
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- Assume: Y= C + I + G + NX C = 400 + (0.8)YD Io = 200 G = 300 + (0.1)(Y* - Y) YD = Y - TA + TR NXo = - 40 TA = (0.25)Y TRo = 50 What is the size of the output gap if potential output is at Y* = 3,000?) What is the equation of the long-run aggregate supply curve? The income velocity of money is constant, and the money supply is fixed: V = 0.15 M = 5600 The production function is Y = F(L, K) = 8 x √L x √K The endowment of resources is given by the input combination (L, K) = (49, 25)Assume the following model of the closed economy in the short run, with the price level (P) fixed at 1.0: C=0.5(Y-T) T=1000 I=1500-250r G=1500 Md/p=0.5Y-500r Ms=1000 a) Derive a numerical formula for the IS curve, showing Y as a function of r alone. B)Derive a numerical formula for the LM curve, showing Y as a function of r alone. C) What are the short-run equilibrium values of Y, r, and national saving (S)?d)Assume that G increases by 1,500 (i.e., G = 3; 000). By how much will Y increase in short-run equilibrium? e)You are the chief economic adviser in this hypothetical economy. Do you believe that fiscal policy is more potent than monetary policy? Briefly discuss f)Derive the numerical aggregate demand (AD) curve for this economy, expressing Y as a function of P
- Suppose that we have an economy whose production can be represented by a Cobb Douglas production function with parameter α=0.3. You may assume that there is no depreciation (i.e. δ=0). a. What fractions of income do capital and labor receive? b. For the following parts, describe what happens to output (in percent), the rental price of capital and the real wage from: i) Suppose that immigration increases the labor force by 10 percent. ii) Suppose that a gift of capital from abroad raises the capital stock by 10 percent. iii) Suppose that a technological advancement raises the value of the parameter A by 10 percent. Type out the correct answer ASAP with proper explanationThe stagflation of the 1970s can be adequately explained using CKM if we add the assumption of an imported input in the production process”. Justify. Is this assumption consistent with world politics and economics of that timeDue to COVID-19 situations the oil prices fall in international market. Let’s assume that output starts at its natural level. a. What happens to the Pakistan’s economy (output and price) in the short run? Explain your answer using AS-AD graphs. b. What happens to Pakistan’s economy (output and price) in the long run? Explain your answers using graphs.
- Many economic analysts believe that currently Indonesian economy is considerably below its potential output. Meanwhile, recent tensions in the Middle East potentially will potentially push the oil price upward significantly coupled with a significant fall in the world income. If Indonesia is an oil importer: a. What will happen to Indonesian national output? Demonstrate your prediction graphically using relevant models. b. What policy might you suggest to the government? c. Demonstrate the expected total effect of your advice using relevant models!The term potential output refers to: a)The maximum possible output for an economy b)The quantity of output that would be produced if every member of the labor force worked 40 hours per week c)The quantity of output produced when the price level is the same as firms and workers expected when they agreed on input prices and wages d)The quantity of output produced at the intersection of the AD and AS curvesFor each of the following scenarios predict how the price level and output will change over time from immediate impact to long-run impact. In each case, consider an economy that was initially producing at its level of potential output. a. The government passes legislation that increases corporate taxes by 25%. b. Economies around the globe are experiencing a time of prosperity and, as a result, demand for U.S. exports increases.
- The short-run economic outcome resulting from the increase in production costs is known as——- Suppose now that the government immediately pursues an accommodative policy by increasing government purchases in response to the short-run impact of the higher oil prices. In the long run, given that the government pursues accommodative policy, the output level in the economy will equal ——- level will equal———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.Hello I need help to find the answer for my econ 101 hw for a question as follows: Assume that the production function for a country is given by ?=√K and annual investment is given by the function ?=?×? where γ=0.270, and that the yearly depreciation rate is 4.50%. Suppose that this year, the output in the country is 1, and a neighbor country's output is 50% higher. Calculate the time it would take for the country's output to catch up with its neighbor's output. Assume the neighbor country's economy is neither growing nor shrinking. I will be also attaching the original problem for your reference as I just need to find the time that it would take the country's output to catch up with its neighbor's output. Thank You and please refer to the image to further assist with the question that I want answered.