Q: Solve the attachment.
A: The long-run aggregate supply represents the potential output an economy is capable of achieving…
Q: The following table lists several determinants of short-run aggregate supply. Fillin the table by…
A:
Q: Refer to the graphs. Which of the following best represents a negative demand shock when prices are…
A: Inflexible price refers to the rigidity of the prices. That means the price will be constant with…
Q: The following table lists several determinants of short-run aggregate supply. 4 Fill in the table by…
A: The curve that depicts various quantities of goods and services being supplied at various price…
Q: Which of the following would cause an increase in long-run aggregate supply? The price level…
A: AS(Aggregate supply) is the curve which shows the relationship between P(price level) and…
Q: Assume that the economy is operating at or near its long‐run aggregate Identify one negative…
A: The macroeconomic equilibrium in an economy is determined by the aggregate demand and aggregate…
Q: What are supply shocks? Why are policy choices hard when there are negative supply shocks? Would you…
A: A supply shock occurs when an unexpected event alters the supply of goods or commodities, resulting…
Q: In 1998, the economy of Aptonville had an aggregate demand and aggregate supply according to the…
A: In an economy, the equilibrium level of general price if the one at which aggregate supply equates…
Q: What would happen to short- and long-run aggregate supply if unusually good weather led to bumper…
A: To determine the impacts on the short run aggregate supply and the long run aggregate supply if…
Q: Which of the following is considered a negative supply side shock? A an improvement in technology an…
A: While supply can refer to anything that is in high demand and sold in a competitive market, it is…
Q: Which range of aggregate supply would represent an economy where prices are rising as output…
A: The aggregate supply of a country's economy is its output of goods and services. The four production…
Q: What might shift the aggregate-supply curve to the left? And explain why long run aggregate supply…
A: The AD or AS model is a macroeconomic model that describes how total supply and total demand…
Q: Which of the following would shift the long-run aggregate supply curve to the right?a. a decrease in…
A: The long-run aggregate supply curve represents the total amount of goods and services supplied in an…
Q: Suppose that the oil price sharply increased for a while, which increase.Can policymakers do…
A: Policymaker: An approach creator is somebody who makes thoughts and plans, particularly those did by…
Q: Suppose there is an international recession hits the US economy, what is the long-run equilibrium…
A: The explanation that at whatever point the economy enters a downturn, its long-run run aggregate…
Q: Illustrate and interpretshifts in the short-runand long-run aggregate supply curves.
A: The aggregate supply (AS) curve indicates the total real GDP or quantity of output that firms can…
Q: Which of the following events will not cause a supply shock that would shift the aggregate supply…
A: A supply shock is any event or calamity which leads to a reduction in the aggregate supply of the…
Q: The economy of Pakistan has faced both a supply demand shock in the first quarter of 2020. Using the…
A: In the Pakistan Economy,The supply demand shock can be explained with the help of a diagram:…
Q: Suppose the United States passes a law that requires large businesses to provide one year of paid…
A: Factors affecting aggregate supply curve:- 1) Cost of Raw material:- Change in cost of raw material…
Q: What effect will each shift have on price levels and quantities? Decrease in Aggregate Demand…
A: Aggregate demand shows the total quantity of goods and services demanded at different price levels.…
Q: For each of the following events, draw an aggregate-demand/aggregate supply diagram and explain the…
A: Aggregate demand and aggregate supply are two forces in the market that helps in analyzing the…
Q: If the price level rises and the money wage rate rises by the same percentage, what happens to the…
A: Answer: The quantity of real GDP will not change and there will be an upward movement along the…
Q: What is the fundamental tradeoff faced by The Fed when responding to a negative real shock? (Three…
A: A negative real shock is the events of an unexpected shock that tends to affect the fundamental…
Q: Suppose that there is a positive aggregate supply shock. Which graph most accurately shows how this…
A: The aggregate demand-aggregate supply model, more generally called the AS-AD model depicts the…
Q: ssume that the Australian economy originally starts at the long-run equilibrium. The shock in focus…
A: The entire amount of goods and services that enterprises are willing to sell at a given price in an…
Q: Which of the following help to explain why the aggregate demand curve slopes downward? a. When the…
A: Hi, In case of multiple questions in a post, we are required to do the first one. Kindly repost…
Q: There are three distinct reasons why the aggregate demand curve slopes downward. List and discuss…
A: The aggregate demand is the total demand for goods and services in an economy. It is downward…
Q: Oil price shocks have been a reoccurring phenomenon over the last fifty years, causing significant…
A: AD-AS model: The AD-AS framework illustrates national wage determination and price level…
Q: Is aggregate demand a specific dollar amount?. For example would it be correct to say aggregate…
A: Aggregate Demand -: It refers to the total quantity of goods…
Q: Market Watch, May 24, 2018 discusses, "what happens if the oil rally turns into an 'oil shock' ".…
A: Aggregate demand (AD) is the sum total amount of commodities and services demanded in an economy at…
Q: An increase in the price of oil is an example of a negative supply shock. Use the AD-AS model graph…
A: AD(aggregate demand) is a negative sloping curve and AS(aggregate supply) is a upward sloping curve…
Q: Which of the following is likely to occur if an increase in legal immigrants significantly reduces…
A: Immigration refers to the international movement of people to a country of which they are not…
Q: If aggregate supply is vertical, what role does aggregate demand play in determining output? In…
A: Aggregate supply describes, for each given price level the quantity of output firms is ready to…
Q: During the transition from the short run to the long run, price level expectations will (remain the…
A: In the long run, when there is an decrease in consumption, it leads to increase in savings which…
Q: Which of the following will most likely cause a rightward shift in the aggregate supply curve? An…
A: The aggregate supply curve is the total of all the supply curves of the entire economy.
Q: For each of the following events, draw an aggregate-demand/aggregate supply diagram and explain the…
A: Hi! thank you for the question but as per the guidelines, we answer up to three sub-parts at one…
Q: A negative supply shock causes output to _____ and the price level to _____.
A: Negative supply shock refer to unexpected event that cause leftward shift in supply curve. This is…
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- Assume the Australian economy is originally at the long-run equilibrium. An abrupt house price crash sends shockwaves throughout the economy. In response to such a shock, households bring their spending on durable goods to the bare minimum, while firms cancel all future upgrade or expansion projects. Required: (a) Explain how the long-run aggregate supply (LRAS), the short-run aggregate supply (SRAS) and the aggregate demand (AD) will be affected by the above shock. Clearly explain why such change(s) would occur. (b) Clearly explain how the above shock would affect the key macroeconomic variables (real GDP, unemployment rate and price level) in the short run. (c) In order to counteract the above shock, do you recommend the government to implement expansionary fiscal policy or contractionary fiscal policy? Clearly explain why. (d) Clearly explain what actions the government can undertake in order to implement the fiscal policy stance recommended in (c).Assume that the economy is operating at or near its long‐run aggregate Identify one negative consequence that would result from a positive demand shock and two negative consequences that would result from a negative supply shock.ssume that the Australian economy originally starts at the long-run equilibrium. The shock in focus is the introduction of robots to undertake manual tasks and replace low-skilled workers. In 2019, Oxford Economics forecasted that approximately 20 million jobs around the world could be replaced by robots by 2030. This trend will exert sweeping and profound impacts on economies around the world, including Australia. Required: Considering the shock above, point out how Aggregate Demand, Short-run Aggregate Supply and Long-run Aggregate Supply will be affected Explain clearly in words the reasons behind the effects on Aggregate Demand, Short-run Aggregate Supply and Long-run Aggregate Supply, as pointed out in
- What happened to the demand for rental cars during the first half of 2021? I.e., was there a positive or negative demand shock? What caused the shock?In the following table, determine how each event likely effects potential output (a.k.a., long-run aggregate supply).Assume that the Australian economy originally starts at the long-run equilibrium. The shock in focus is the introduction of robots to undertake manual tasks and replace low-skilled workers. In 2019, Oxford Economics forecasted that approximately 20 million jobs around the world could be replaced by robots by 2030. This trend will exert sweeping and profound impacts on economies around the world, including Australia. Required: Considering the shock above, point out how Aggregate Demand, Short-run Aggregate Supply and Long-run Aggregate Supply will be affected Explain clearly in words the reasons behind the effects on Aggregate Demand, Short-run Aggregate Supply and Long-run Aggregate Supply, as pointed out in
- Assume that the Australian economy originally starts at the long-run equilibrium. The shock in focus is the introduction of robots to undertake manual tasks and replace low-skilled workers. In 2019, Oxford Economics forecasted that approximately 20 million jobs around the world could be replaced by robots by 2030. This trend will exert sweeping and profound impacts on economies around the world, including Australia. Required: Considering the shock above, point out how Aggregate Demand, Short-run Aggregate Supply and Long-run Aggregate Supply will be affectedCan you explain how positive and negative supply shocks affect market equilibrium in terms of price and quantity?For Shock F: Suppose the economy starts in the long run equilibrium. Illustrate changes that the shock will cause in the short run (using AD-SRAS). Explain why each curve shifts. Determine how the price level and output will be affected in the short run. Mark the output gap on the diagram. Is the output gap positive or negative? Is the economy is booming, or is it in a recession? On the same diagram illustrate how the economy will adjust to the shock in the long run and explain the mechanism. Determine how the price level and output will be affected in the long run. F. The central bank decides to raise the money supply; as a result, the interest rate in the economy goes down As a result of this shock, in the short run the (SRAS Curve/AD Curve) will shift? In consequence, in the short run prices and output will? In the short run, there will be a ? (negative/postive) output gap,which means there will be a ? (boom/recession) As time passes, because of high unemployment the…
- For Shock C: Suppose the economy starts in the long run equilibrium. Illustrate changes that the shock will cause in the short run (using AD-SRAS). Explain why each curve shifts. Determine how the price level and output will be affected in the short run. Mark the output gap on the diagram. Is the output gap positive or negative? Is the economy is booming, or is it in a recession? On the same diagram illustrate how the economy will adjust to the shock in the long run and explain the mechanism. Determine how the price level and output will be affected in the long run. C. Firms expect an economic boom in the coming years As a result of this shock, in the short run the (SRAS Curve/AD Curve) will shift? In consequence, in the short run prices and output will? In the short run, there will be a ? (negative/postive) output gap,which means there will be a ? (boom/recession) As time passes, because of high unemployment the wages in the economy will? (decrease/increase) As a result,…What is positive supply shock? What are the few examples to positive supply shocks? What is the impact of positive supply shock on the aggregate demand?For Shock E: Suppose the economy starts in the long run equilibrium. Illustrate changes that the shock will cause in the short run (using AD-SRAS). Explain why each curve shifts. Determine how the price level and output will be affected in the short run. Mark the output gap on the diagram. Is the output gap positive or negative? Is the economy is booming, or is it in a recession? On the same diagram illustrate how the economy will adjust to the shock in the long run and explain the mechanism. Determine how the price level and output will be affected in the long run. E. The government raises unemployment benefits As time passes, because of high unemployment the wages in the economy will? (decrease/increase) As a result, the SRAS curve will shift ? (right/left), causing the price level to ? (increase/fall) and output to eventually return to its long run level Y*.