Answer all the subpart. Suppose you are given the following information about an economy:Short run Aggregate Supply:SRAS = Y = 5000r+ 14,400Long run Aggregate Supply:Aggregate Demand:Investment Spending:Consumption Spending:Government Spending:Net Exports (eX – iM):LRAS = Y* = 25,000AD = Y=C+I+G+NX_I = 4000 – 250rC = 1000 +0.75(Y – T)G = 2000NX = 500Taxes – Transfers:T = 2400Monetary Policy:Money Demand:Money Market equilibrium:Fisher equation:where i is the nominal interest rate (i.e. when the interest rate is 7%, it means i= 7)r = 2 nм 3 20,000- 2000iM$ = MDi = r+Te. Find the short run equilibrium level of real GDP (Y), and inflation rate (t), in the short run. What is the output gapin the economy? Is it an expansionary or recessionary gap?

Suppose you are given the following information about an economy: Short run Aggregate Supply: SRAS Y = 5000r + 14,400 %3D Long run Aggregate Supply: Aggregate Demand: Investment Spending: Consumption Spending: Government Spending: Net Exports (eX– iM): Y* = 25,000 Y = C+I+G+ NX I = 4000 – 250r C = 1000 + 0.75(Y – T) LRAS AD G = 2000 NX 500 %3D Taxes – Transfers: T = 2400 %3! Monetary Policy: Money Demand: Money Market equilibrium: Fisher equation: r 3D MP = 20,000 – 2000i M$ = MP %3D i = r+n where i is the nominal interest rate (i.e. when the interest rate is 7%, it means i = 7) e. Find the short run equilibrium level of real GDP (Y), and inflation rate (1), in the short run. What is the output gap in the economy? Is it an expansionary or recessionary gap?

Suppose you are given the following information about an economy: Short run Aggregate Supply: SRAS Y = 5000r + 14,400 %3D Long run Aggregate Supply: Aggregate Demand: Investment Spending: Consumption Spending: Government Spending: Net Exports (eX– iM): Y* = 25,000 Y = C+I+G+ NX I = 4000 – 250r C = 1000 + 0.75(Y – T) LRAS AD G = 2000 NX 500 %3D Taxes – Transfers: T = 2400 %3! Monetary Policy: Money Demand: Money Market equilibrium: Fisher equation: r 3D MP = 20,000 – 2000i M$ = MP %3D i = r+n where i is the nominal interest rate (i.e. when the interest rate is 7%, it means i = 7) e. Find the short run equilibrium level of real GDP (Y), and inflation rate (1), in the short run. What is the output gap in the economy? Is it an expansionary or recessionary gap?

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter20: Aggregate Demand And Supply

Section: Chapter Questions

Problem 8SQP

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