3. Using aggregate demand and aggregate supply analysis, show the effects of the following (Assume neo-Keynesian AD and AS curves.): a. deflation b. an increase in investment spending c. an increase in the average wage rate d. an income tax cut
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- How is long-term growth illustrated in an AD/AS model?Use the keynesian cross to predict the impact of:A.an increase in government purchase. B.an increase in taxes. C.an equal increase in government purchase and taxes. Urgent.09. The left-hand Which of the following statements is tru about the diagrams above depicting the macroeconommy in both Keynesian and Classical frameworks and a change from AEo to AE* and ADo to AD*? a) The left-hand diagrams show the effect of an increase in Aggregare Expenditures (and Aggregate Demand), where the short-run Aggregate Supply is horizontal, meaning a constant products price level. b) The right hand diagrams show the effect of an increase in Aggregate Expenditrues (and Aggregate DEmand), where short-run Aggregate Supply is vertical (constant Aggregate Quantity Supplied). c) The left-hand diagrams illustrate the Keynesian range of the shor-run Aggregate Supply curve, where Keynesian expansionary policy does not cause any inflation and thus is very effective. d) The right-hand diagrams illustrate the Classical or Monetarist range of the short-run Aggregate Supply curve, where Keynesian expansionary policy is totally dissipated in…
- Using the AD- AS model, show the effects of an increase in government spending assuming the economy begins at full employment. In addition, explain the self-correcting mechanism. 12 Point Show me thw graph along with explaining it as an essay. I need the graphSuppose government-spending increases while the economy is at full employment. 1. What effect will this action have on the economy? In other words, which curve shifts and in which direction? 2. Where is the economy in the business cycle - YE YFE 3. What will happen according to Keynes? Explain how the economy returns to full employment. 4. What will happen according to the Long Run Model? Explain how the economy returns to full employment. 5. From your answer in #4 above, what happens to the Phillips Curve? 6. This was not covered in the video but what do you anticipate the Federal Reserve to do with the key interest rate after the increase in government spending above? P Type here to search 41 144 40 $1 4. 8. EI K. M. LLAssume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on:1. aggregate demand, 2. aggregate supply, 3. price level, and 4. real GDP. a) The Central Bank increases the cash interest rate i need ans of this too.
- Assume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on:1. aggregate demand, 2. aggregate supply, 3. price level, and 4. real GDP. (a) An increase in government expenditure in infrastructureClick or tap here to enter text.(b) A severe recession occurs in a country, which has been a major importer of thenation’s exports.Click or tap here to enter text.(c) The federal government increases business taxesClick or tap here to enter text.(d) The Central Bank increases the cash interest rate1. Explain the difference between Keynesian economics and Classical economics by mentioning the complete name of the economist who develops the theory/model. 2. Describe each of the components of the GNP equation and which one you feel can distort GNP the most.A central bank forecasts a rise in raw material costs. The government plans to increase spending on health and education. The initial equilibrium point is shown by X on the aggregate demand, AD, and aggregate supply, AS, diagram. What would be the new equilibrium point in the short run if the forecasts prove to be accurate and the government plans are implemented? AS, AS2 general price level AS B A AD, AD AD, real output C.
- 3. Graphically illustrate the Keynesian Model, show the equilibrium level of GDP (label it Ye) and the full employment level of GDP (label it Yf).In the Keynesian model, an increase in government spending increases ___. A.aggregate demand by an equal amount. B.aggregate demand by a multiple amount. C.the money supply by a multiple amount. D.the money supply by an equal amount.How to construct a Ad, SRAS and LRAS curve for economy with.. full employment Economic boom A recession
