Principles of Macroeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134421193
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 12, Problem 2.1P
Sub part (a):
To determine
Identify the effects of equilibrium level of
Sub part (b):
To determine
Identify the effects of equilibrium level of aggregative output and the interest rate.
Sub part (c):
To determine
Identify the effects of equilibrium level of aggregative output and the interest rate.
Sub part (d):
To determine
Identify the effects of equilibrium level of aggregative output and the interest rate.
Sub part (e):
To determine
Identify the effects of equilibrium level of aggregative output and the interest rate.
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Students have asked these similar questions
Given the following circumstances, indicate whether or not the aggregate supply curve would shift and, if so, which way would it shift:
The price of a barrel of oil doubles
An advance in alternative energy technology significantly reduces its cost
In order to maintain a relatively clean air quality, a carbon emissions tax is levied against firms with a carbon footprint
As a result of fracking, the price of natural gas is significantly reduced
Advances in technology increase the productivity of the American worker, on average, by 30%
Does each scenario below cause a movement along the curve or a shift in the curve? Explain using the model of Aggregate Demand and Aggregate Supply.
[1] Consumers in the U.S. read negative economic news and they expect weak future economic growth.Â
[2] Due to the decrease in the price level in the U.S., consumers substitute out of clothes made overseas into clothes made in the US.Â
[3] An increase in the price level leads to less savings, which increases the interest rate.Â
[4] Several European economies go into recession due to the current pandemic.
Assume the economy of Germany is in a long run equilibrium with full employment.
Draw a correctly labeled graph of short run aggregate supply, long run aggregate supply, and aggregate demand. Show each of the following
Equilibrium output, labeled Y1.
Equilibrium price level, labeled PL1Â Â
2. Suppose that there is a significant boom in the German stock market, causing all stocks to increase in value by 15%. On your graph in part A, show the effect this will have on the equilibrium in the short run, labeling the new equilibrium output and price level Y2 and PL2, respectively.
3. Using a correctly labeled graph of the Phillips Curve, show how this change will affect the economy.
4. What two fiscal policy options does the federal government have to fix the market imbalance? Explain how each would affect the economy.
Chapter 12 Solutions
Principles of Macroeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
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