Using the “dynamic aggregate demand” and “dynamic aggregate supply” (DAD/DAS) model: (b) draw a graph and discuss the effect of an adverse supply shock, such as a rise in oil prices.
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Using the “dynamic aggregate
(b) draw a graph and discuss the effect of an adverse supply shock, such as a rise in oil
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- Philotechnia requires every high school graduate to be computer literate because so many workplaces are using different forms of information technologies. How is the aggregate demand–aggregate supply model affected? Demonstrate the effect by shifting the appropriate curve or curves.Which of the following events would not involve a supply shock that would shift the aggregate supply curve? (i) The Cosatu union disintegrates and the minimum wage is abolished. (ii) African bank plc’s bad debt creates a financial crisis and that leads to reduction in money supply. (iii) 2016 drought destroys half of the crops farmed. (iv) A tax on sugar is levied on companies that produce sugary beverages. Group of answer choices Only ii and iv are correct. Only ii is correct. Only iii and iv are correct. Only i and ii are correct.Starting with long run equilibrium, use the aggregate demand and aggregate supply model to illustrate what happens in the short run when the economy suffers a negative supply shock.
- Evaluate the following statements using relevant diagrams and provide detailed explanations. The statements describe events that might shift aggregate demand (AD), aggregate supply (AS), both or neither. Clearly label your diagrams. A recent economic report suggests that consumer confidence has increased Apple Inc. has announced a 50% discount on its new generation iPad devices for university students After a prolonged acceleration in economic activity, the government raises the rate of personal income tax. A continuing economic expansion has drawn in many working age people (and their families)from neighbouring countries in search of jobs and better livesBased on Aggregate Demand and Aggregate Supply Model, what is the effect on AS of each of the following events (will AS increase and shift to the right or decrease and shift to the left): (A) Decrease in labor force (B) Increase in productivity (C) Increase in capital stockUsing the “dynamic aggregate demand” and “dynamic aggregate supply” (DAD/DAS) model: draw a graph and discuss the effect of an adverse supply shock, such as a rise in oil prices. (Your answer should be 150 words ±10%)
- Which of the following events will not cause a supply shock that would shift the aggregate supply curve? a.Tax for energy use introduced to help reduce global emissions b.natural disasters which destroys agricultural products c.adjustments in the interest rates for housing d.The OPEC cartel for oil prices collapses due to political disagreementsAnswer the given question with a proper explanation and step-by-step solution. Which of the following will increase both the short-run and long-run aggregate supply curves? A. There are fewer firms involved in perfectly competitive and monopolistically competitive market structures as the economy features more oligopolies than before. B. The wage rate temporarily decreases throughout the economy. C. Younger workers in the labour force receive better and more training than their predecessors. D. The supply of key raw materials, such as petroleum and bauxite, is reduced. Which of the following is true concerning shifts of the long-run aggregate supply curve? A. An increase in the long-run aggregate supply curve causes its slope to become steeper as real GDP increases. B. An increase in the long-run aggregate supply curve causes greater unemployment. C. An increase in the long-run aggregate supply curve is depicted as a rightward shift and an increase in real GDP. D. A decrease…The Canadian economy suffered two major shocks in 2008, leading to the severe recession of 2008–2009. One shock was related to oil prices; the other was the slump in both consumer and business confidence. This question analyzes the effect of these two shocks on GDP using the AD–AS model. Draw typical aggregate demand and short-run aggregate supply curves. Label the horizontal axis “Real GDP” and the vertical axis “Aggregate price level.” Label the equilibrium point E1, the equilibrium quantity Y1, and equilibrium price P1. Would an increase in oil prices cause a demand shock or a supply shock? Redraw the diagram from part (a) to illustrate the effect of this shock by shifting the appropriate curve. The New Housing Price Index, published by Statistics Canada, calculates that Canada’s home prices fell by an average of 3% in the 12 months between April 2008 and April 2009. Business fixed capital formation fell by 19% during the same period. Would the fall in home prices and business…
- Which of the following help to explain why the aggregate demand curve slopes downward? a. When the domestic price level rises, our goods and services become more expensive to foreigners. b. When government spending rises, the price falls. c. There is an inverse relationship between consumer expectations and personal taxes. d. When the price level rises, the real value of financial assets (like stocks, bonds, and savings account balances) declines. Label each of the following descriptions as being either an immediate-short-run aggregate supply curve, a short-run aggregate supply curve, or a long-run aggregagte supply curve. a. A vertical line b. The price level is fixed c. Output prices are flexible, but input prices are fixed d. A horizontal line e. An upsloping curve f. Output is fixed What effects would each of the following have on aggregate demand or aggregate supply, other things equal? In each case, use a diagram to show the expected effects on the equilibrium price level…Consider the effects of Corona virus pandemic on the macro economy in Kenya. Suppose we assume that the massive lockdown of the economy that followed the outbreak represents a large negative aggregate demand shock, use the aggregate demand-long-run aggregate supply-short-run aggregate supply (AD-LRAS-SRAS) model to show what happens to output, prices and unemployment. Thank youThe principal goal of the aggregate demand and aggregate supply model is to explain the
