Suppose that you have an AEF at a price level of p = $100 given by: AEF = 1,200+ 0.50Y Suppose also that for every $1 increase in the price level, desired consumtion decreases by $1.
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- Why does the AD curve slope downward? Why does the AS curve slope upward? How is the AS/AD graph like a standard supply-and-demand dia-gram? How is it diferent?Graphically show the likely short-run impact on US real GDP and aggregate price level using the AD/AS model. Explain your prediction. Which curve in the AD/AS model would a change in US consumer consumption affect? Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.Determine whether the ad or as curve with shift with each scenarios below. Each situation is independent of each other. 1- a increase in the personal income tax rate. AD or AS 2-an increase in government spending 3-decrease in resource prices 4-decrease in subsidies for businesses 5-decrease in interest rates
- Consider the AS/AD model. Moreover, suppose the economy is in Short-Run and Long-Run equilibrium.a. Illustrate the economy in an (x,y) plane where rgdp is on the horizontalaxis and the price level is on the vertical axisExplain, using the AD-AS model, the effect of an increase in investment in themacroeconomy on the equilibrium price level and the equilibrium level of output.(10)Q.1.2 Can demand management policies be used to combat stagflation? Explain youranswer.(2)Q.1.3 Identify three ways in which aggregate supply could decrease in an economy.Drive the AD (Aggregate Demand) curve using the following: IS curve is given as Y = 20XX-100i, LM1 is Y= 1000+25i (when P = 1) and LM2 is Y = 500+25i (when P =2), where XX =30. Show the derivation in (interest rate-income) and (price level-income) spaces.
- Explain, with the aid of three separate IS-LM-FE diagrams, how a decrease in government purchases will affect real output, real interest rate and the general price level in three steps:(i) before the general price level adjusts;(ii) when the general price level is adjusting;(iii) after the price adjustment process is completed.Is the general price level increasing or decreasing during the price adjustment process? Explain the intuition of your answer with reference to the AD-AS framework.Assume the economy begins with potential real GDP = $13.7 trillion, while actual real GDP = $14 trillion and the Price Level (GDP Deflator) = 210 in the AD/AS model. A year later the Price Level = 212 and actual real GDP = $14.1. Based on their relative effects on the AD/AS model, which of the following scenarios best explains this new outcome? The effect of a(n) Group of answer choices: increase in consumer spending is MORE than the effect of a decrease in natural gas prices. increase in wages is LESS than the effect of an increase in consumption taxes. decrease in physical capital is LESS than the effect of a decrease in oil prices. increase in oil prices is MORE than the effect of negative business expectations.Suppose, initially the Australian economy is at full employment (in other words the economyis at the potential GDP). Using AD-AS model, explain how would each of the following eventsaffect the economy both in the immediate and in the long term. An increase in consumer confidence.
- Suppose an economy is initially in equilibrium at its potential level of output. As a result of an unexpected pandemic, the AD curve suddenly shifts to the left by a horizontal distance equal to $304 billion. How much will the output fall as a result of this shift in demand? (Calculate your answer in billions of CAD and write it without units. E.g., write 1 for $1 billion.Please help me with this. Thank you! Indicate what to you is our most urgent or relevant macroeconomic goal and why. And, how will this affect the AD-AS Model in the short-run, if applicable?If workers look around and see prices rising more quickly than they had planned for, what is the likely effect on their real wage? And what does that imply for income and employment? Again, use the AD/AS model's chart or equations.
