**1. The graph below shows the AD-AS diagram for Canada.****Graph Explanation:**The graph depicts the Aggregate Demand (AD) and Aggregate Supply (AS) framework for Canada. It features the following elements:- **Axes:** - The vertical axis represents the "Price Level." - The horizontal axis represents "Real GDP."- **Curves:** - The **AD curve** (blue line) slopes downwards from left to right, indicating the inverse relationship between the price level and the quantity of Real GDP demanded. - The **SRAS curve** (red line) slopes upwards, illustrating the direct relationship between the price level and the quantity of Real GDP supplied in the short run. - The **LRAS line** (black vertical line) is fixed and represents the potential output of the economy, indicating the full employment level of Real GDP.The intersection of the AD curve and SRAS curve determines the equilibrium in the short run.**GDP Gap Analysis:**The position of the equilibrium relative to the LRAS line helps to identify any output gaps:- **Equilibrium occurs at a lower Real GDP than the LRAS.** - This indicates that the current output is less than the economy's potential output.**Question:**What type of the GDP gap is observed in Canada (select one)?a. There is no recessionary or inflationary gap. b. The economy is facing a recessionary gap. c. The economy is facing an inflationary gap.

Inflationary gap is when the actual GDP is greater than the potential GDP of the country.…

1. The graph below shows the AD-AS diagram for Canada. 1200† 1100+ 1000 900 800 700+ 600 400 » 300 - ' 200 100+ LRAS 100 200 "Real GDP 400 500 600 700 800 900 1000 1100 126 What type of the GDP gap is observed in Canada (select one)? a. There is no recessionary or inflationary gap. b. The economy is facing a recessionary gap. c. The economy is facing an inflationary gap. Price Level

1. The graph below shows the AD-AS diagram for Canada. 1200† 1100+ 1000 900 800 700+ 600 400 » 300 - ' 200 100+ LRAS 100 200 "Real GDP 400 500 600 700 800 900 1000 1100 126 What type of the GDP gap is observed in Canada (select one)? a. There is no recessionary or inflationary gap. b. The economy is facing a recessionary gap. c. The economy is facing an inflationary gap. Price Level

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Pls answer to below homework question.
Question is attahed in image
Fill in the blank BECKY: The professor used the aggregate demand and aggregate supply model to show that ______ (options: an increase, a decrease) in spending on construction of new houses causes an _______ (options: inward, outward) shift of the aggregate ________ (options: supply, demand) curve. ALEX: I see it now. And as a result, GDP __________ (options: declines, rises) as well. I would like to use a graph to illustrate what you’ve just said.
3 Two countries A & B have completely fixed and flexible prices respectively. Consider this data GDP A Prices A GDP B Prices B year 1 5200 units 26 5200 units 26 year 2 there occurs a negative demand shock. A has a 30% decline in output. B has a 30% decline in prices. Compute Real GDP in A and B in year 1 and 2. 4 answers. Which county would experience a recession? Why?
1. How do consumption and investment spending affect aggregate expenditures and output over the business cycle?
LAS 130 SAS 120 110 B. 100 90 AD1 ADo 14 15 16 17 18 19 Real GDP (trillions of 2009 dollars) 19) In the above figure, if the economy initially is at point A and government expenditure increases, in the short run the economy will move to point A) B. C) A, that is, the equilibrium will not change. B) C. D) None of the above answers is correct. lnim that protectionism saves domestic jobs? Price level (GDP deflator, 2009-100
The macroeconomy is depicted by the graph to the right 160- a. The current equilibrium price level and output level respectively are: and $ trillion. LRAS (Enter your responses as a whole numbers.) 140- SRAS 120- 100- 80- 60- AD 40- I 10' 12 14 16 18 20 Real GDP ($ trillions) Price level
In the graph you've just explored, when did the most recent expansion begin? The most recent expansion began _____. A. At the trough in 2009 B. at the peak in 2007 C. in 2005 D. in 2008 when real GDP equaled potential GDP
None
What type of output gap occurs when the economy is below full employment? The economy is below full employment. Draw the aggregate demand curve. Label it AD. Draw a point at the equilibrium. C 140- 130- Price level (GDP price index, 2012-100) 120- 110- 100- 90- 90 80- 18.0 Potential GDP AS ☑ 18.5 19.0 19.5 20.0 20.5 21.0 21.5 22.0 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question.
Price level (GDP price level, 2005 = 100) 116- Potential GDP 112- AS 108- 104- 100- 96- 92- 88- AD 84- 80+ 530 540 550 560 Real GDP (trillions of 2005 yen) 570 580 >>> Draw only the objects specified in the question. The graph shows the Japanese economy at the beginning of 2010 Draw an aggregate demand curve that is consistent with a falling unemployment rate. Label it AD, Draw an aggregate supply curve that corresponds to the price level falling and the economy still remaining in a recessionary gap Draw a point at the new macroeconomic equilibrium. Click to enlarge graph The economic recovery will occur and deflation will ease if O A. aggregate demand increase faster than aggregate supply increases OB. aggregate supply increases faster than aggregate demand increases OC. aggregate supply decreases with no change in aggregate demand O D. aggregate demand decreases with no change on aggregate supply
1. Climate changes and the Ukrainian-Russian war disrupt global output. Malaysia imports agricultural products from overseas. Assume that the economy is initially operate at its full employment. Based on above situation, explain the effects of this on the economy in the short run. Use AD-AS diagram in your illustration.