What determines the position of the FE line? Give an example of changes in the economy that would shift the FE line to the right.

Q: Choose two factors that could cause AD to shift in the months to come and explain the direction of…

A: Aggregate demand is the total purchase of final goods and service by all sectors in the economy…

Q: what two soluation did keynes suggest as appropriate polices in order to close a reccessnary gap ?

A: A recessionary gap refers to the difference between actual and potential production in an economy,…

Q: Is Say’s Law or Keynes’s Law a better macroeconomic perspective for our economy ? Explain.

A: Macroeconomics is the division of economics that talks about the economy as a whole. In this, the…

Q: Use an IS curve and an MP curve to derive graphicallythe AD curve

A: The IS curve expresses the equilibrium in the goods market. It is a negatively sloped curve that…

Q: What is the multiplier effect and how is it beneficial to the economy?

A: The multiplier effect shows the change in final income due to an injection of spending. For example,…

Q: Why does the IS curve slope downward? explain

A: Answer to the question is as follows :

Q: In the Aggregate Expenditure framework, which of the following government policy choices offer a…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: What is the likely impact of expansionary policies when the economy is operating at full capacity on…

A: The impact of expansionary policies when the economy is operating at full capacity on the vertical…

Q: Planned Actual expenditure expenditure, PE PE Planned expenditure PE, PE2 PE Y Y2 Y3 Income, output…

A: Given information: Y2 = 650, Y3 = 800 and PE3 = 740 At Y3=800, PE3 = 740 At Y2, the actual…

Q: Assume an economy is currently operating at point A. Illustrate using the IS-LM model how the policy…

A: Simultaneous equilibrium in both goods and money market is determined by the intersection of the IS…

Q: which of the following would cause the aggregate expenditure line to shift downward? A   Congress…

A: Aggregate expenditure is equal to GDP. GDP refers to the total value of finished goods and services…

Q: Explain in technical details why the Lagrange multiplier is currently used in analyzing the theory…

A: In economics, the Lagrange function is used to address optimization issues.

Q: Assume that the marginal propensity to consume is 0.75 and that taxes are exogenous. Imagine that…

A: MPC= Marginal propensity to consume= change in consumption / change in income If there is change in…

Q: When the economy is out of general equilibrium, which of the three curves (FE, IS, LM) shifts to…

A: General equilibrium investigates the economy overall, rather than examining single business sectors…

Q: Briefly explain the reason for the near-vertical shape of the SRAS curve on its far right.

A: SRAS is the short run aggregate supply curve which depicts the relationship between the price(P) and…

Q: What are some examples of changes in the economy that would lead to a movement along the IS curve?…

A: IS Curve shows relationship between interest rates and output level in the economy.

Q: Draw diagram of a typical IS-LMmodel and indicate the changes in all the variables on the diagram…

A: The IS-LM model describes how goods market and money markets interact to balance the rate of…

Q: Discuss the multiplier effect including a description of what it describes in macroeconomic terms,…

A: The multiplier effect refers to the proportional amount of increase, or decrease, in final income…

Q: Reading the following paragraph has a multiplier occurred and how is this shown on the aggregate…

A: In economics, a multiplier is a term that describes an economic factor. When increased or changed,…

Q: )Give an example of something that could have caused this. ) What happens to GDP and price level? =)…

A: "Since you have asked multiple parts, we will answer only first three parts for you, if you have any…

Q: AS1 110 B 100 - AD2 AD1 900 960 1100 Real GDP FIGURE 23-5 Refer to Figure 23-5. Suppose that an…

A: The equilibrium with AD 1 is at AD1=AS1 where GDP=900 After the change with a simple multiplier, it…

Q: onsider the following macroeconomy. All amounts are in millions (m.) of $: C = 750 + 0.8 YD…

A: Hi Student, thanks for posting the question. As per the guideline we are providing answer for the…

Q: What would be the impact of an appreciating currency on aggregate demand? a) Decrease b) Increase

A: The impact of an appreciating currency on aggregate demand will Decrease.

Q: Explain why an upward shift of the consumption schedule typically involves an equal downshift of the…

A: Income=Consumption+Saving At a particular level of consumption and saving, income remains the same.…

Q: Answer the following questions, which relate to the aggregate expenditures model: Instructions:…

A: The current valuation of the goods and also of the services that are finished in an economy is done…

Q: Suppose that exports increase by $300 billion, given an MPC of .75. Calculate the change in GDP.…

A: Gross domestic product (GDP) is the standard measure of the value added created through the…

Q: Country A faces both a rise in Real GDP and Price Level. What does this say about its AD and LRAS,…

A: ‘Real GDP’ measures the ‘goods & services’ valued at a constant price. ‘Real GDP’ or ‘gross…

Q: When imports rise, net exports (We'll reuse this information in the next two questions.) O rises;…

A: Note: You have uploaded two different questions simultaneously. Hence, we shall answer the first one…

Q: In the Aggregate Expenditure framework, which of the following government policy choices offer a…

A: In economics, aggregate spending (AE) is employed to measure national revenue. Aggregate expenditure…

Q: In the hypothetical economy, the AD curve and SAS curve are given by the following equations: AD:…

A: Given Functions Aggregate demand function Y=560-20P+3G Aggregate supply function Y=8+5P-3P(oil)

Q: What does it mean when the aggregate expenditure line crosses the 45-degree line? In other words,…

A: Aggregate expenditure: - it is the present value of all final goods and services produced in an…

Q: It is possible that the interest rate might affect consumption spending. An increase in the interest…

A: IS stands for “investment” and “saving,” and the IS curve represents what’s going on in the market…