) What is the equation of the long-run aggregate supply curve? The income velocity of money is constant, and the money supply is fixed: V = 0.15 M = 5600 The production function is Y = F(L, K) = 8 x √L x √K The endowment of resources is given by the input combination (L, K) = (49, 25)
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) What is the equation of the long-run
The income velocity of money is constant, and the money supply is fixed:
V = 0.15
M = 5600
The production function is
Y = F(L, K) = 8 x √L x √K
The endowment of resources is given by the input combination
(L, K) = (49, 25)
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- Given the following information: - The economy is in the long-run equilibrium. - The Fundamental Equation of Monetarism is true. - The income velocity of money is constant and the money supply is fixed: v=0.15 M=5600 - The production function is Y=F (L,K) = 8×√L×√K - The endowment of resources is given by the input combination (L,K) = (49,25) A. Find the equation of the aggregate demand curve. B. What is the equation of the long-run aggregate supply curve? C. What is the equilibrium price level when the unemployment rate is at NAIRU?Following the equation: Y = C + I + G + NX, will the examples given below increase or decrease the aggregate demand in Pakistan? What will be the shift in position for the Following scenarios. Widespread fear of recession The appreciation in the Pakistani Rupee rate A boom in the stock market An increase in transfer payment A decrease in real interest rate in PakistanFollowing the equation: Y = C + I + G + NX will the below examples increase or decrease the aggregate demand in Pakistan? What will be the shift in position for below situations? Widespread fear of recession (1 Mark) The appreciation in the Pakistani Rupee rate (1 Mark) A boom in the stock market (1 Mark) An increase in transfer payment (1 Mark) A decrease in real interest rate in Pakistan (1 Mark)
- Answer 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…Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo respectively, which of the following explains the adjustment towards long-run equilibrium depicted in Figure B? a. Unemployment (resulting from the short-run equilibrium being below LRAS) causes wages to decline, which increases AS till long-run equilibrium is attained at full employment level of income and a lower price level. b. Government spending is increased, increasing AD to a level sufficient to attain long-run equilibrium at full employment level of income and a higher price level c. In attempting to produce beyond the economy's natural level of GDP, producers bid up wages and prices of other resources, causing the AS to decrease to the point where long-run equilibrium is restored. d. Taxes are increased reducing AD to a level consistent with long-run equilibriumQ. 4 For each of the following statements , show graphically and explain the expected effets of the equilibrium price and output for aggregate demand and aggregate supply , other things remaining constant . a . An appreciation in currency. b . An increase in price of non - labor inputs. C. A decrease in real wage rates.
- please HAND WRITTEN Graphically show) how an exogenous increase in Money Demand affects aggregate output, interest rate, the price level, the wage.Explain your shifting in logical progression.Clearly state the final results.Label all curves/lines properly.Which of the following would shift the long run aggregate supply curve to the left? Decrease in consumption Decrease in the wage rate Decrease in resources Decrease in profit. All of the following would cause a decrease in the aggregate demand except Increase in interest rates Household wealth falls Dollar depreciates relative to foreign currencies Increase in tax rates.According to the model of aggregate demand and supply, in the long run an increase in the money supply would cause: a) Prices and outputs to fall b) Prices to fall and outputs to rise c) Prices to rise and outputs to fall d) Prices to rise and outputs to remain unchanged e) None of the above
- the misperceptions theory of the short run aggregate supply curve says that if the price level is higher than people expected then some firms believe that the relative price of what they produce has decreased and so they increase production decreases so they decrease produciton increased so they increase production increased so they decrease productionCompare the effects of a change in money supply and technology in a model with fully sticky prices and partially sticky prices. Describe the dynamics that makes the model move from a short run equilibrium to a long run equilibrium. How would your answers be different if the model had perfectly flexible prices. Why short run equilibrium output level is not efficient? Give proper economic reasoning.Assume that aggregate demand is unaffected by the gas tax holiday. After the economy has fully adjusted to the gas tax holiday, the long-run effect is (an increase, no change, a decrease) in aggregate output and (an increase, no change, a decrease) in the price level.
