1.Why does IS curve slope downward? 2.why  does LM curve slope upward? 3. Explain the prominent models of short run aggregate supply curves?

Q: The new Keynesian cycle theory views only anticipated changes in aggregate demand as the source of…

A: The above statement is true. According to the new Keynesian cycle theory firms and households have…

Q: 1.) Use the line drawing tool to show the effects of a positive aggregate demand shock that might…

A: Shift in AD occurs when there is a change in any of its components: C(consumption), I(investment),…

Q: A) Suppose the economy is in full employment and that people start using cash less frequently in…

A: Answer -   IS-LM :- IS-LM is a model help evaluate overall economic activity. As IS deals with the…

Q: a) If the economy is initially at the WS-PS equilibrium, what happens when there is a sudden…

A: (a) In the macroeconomic model of WS-PS, the wage (WS) setting curve is upward rising implying that…

Q: Specific Subject: Macroeconomics - AD and AS Shocks Analyse the case of a negative supply shock…

A: 4. Aggregate demand: It is the sum total of the final value of the goods and services that are being…

Q: 1.) Use the line drawing tool to show the effects of a positive aggregate demand shock that might…

A: A positive aggregate demand shock increases output, income and employment in the economy. It causes…

Q: Q5. Draw the IS-LM and AD-AS diagrams and explain the following: (15) a. Suppose Fed increases M.…

A: The IS-LM model explains the market equilibrium interest rate and real output or income. Under this…

Q: Consider the aggregate supply-aggregate demand (AD-AS) model that we saw in class. Assume that…

A: Long run refers to a period of time where all cost and factors of production become variable.All…

Q: Please answer question 4 1.Draw Aggregate Demand, Short Run Aggregate Supply, and Long Run…

A: Meaning of Aggregate Demand and Aggregate Supply: The term aggregate demand refers to the…

Q: What is the eqution and shape of the modem aggregate supply curve according to imperfect infomation…

A: Since the question you have posted consists of multiple parts, we will answer the first two parts…

Q: A leftward shift in the aggregate supply curve is also referred to as: O a favorable shift O an…

A: The economics as a study is based upon the idea that the resources which are available with the…

Q: Suppose the Australian government announces that it will bring the federal budget deficit to zero,…

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Q: 1. Assume a nco-classical aggregate supply model with both long run and short run aggregate supply…

A: Short-run alludes to the time-frame in which the makers need more opportunity to change every one of…

Q: Attached: Figure 2: Keynes’s AD-AS Model Question 1  Changes in which factors could cause aggregate…

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Q: 1. Assume that a country's economy is in a short-run equilibrium and the actual unemployment rate is…

A: Answer - Part C Answer - Graph-

Q: For each of the three theories for the upward slopeof the short-run aggregate.supply curve,…

A: The labour market is the basis for the sticky-wage model of the upward sloping short term aggregate…

Q: the long run. The initial full-employment level of output is y-900 and the Consider the aggregate…

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Q: 1. Which of the following would cause the dynamic DAD (Dynamic Aggregate Demand) curve to shift in…

A: Since we are entitled to answer only one question per request, we would be answering the first…

Q: Refer to the diagram that shows an ADIAS model for a hypothetical economy. The economy begins in…

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Q: Compare the traditional Keynesian, new Keynesian, and real business cycle models in terms of…

A: Note .. post b part seperately  Answer a questions

Q: 2. What is the egution and shape of the modem aggregate supply curve according to imperfect…

A: We will answer only the third question for you.  The Imperfect Information Model states that neither…

Q: Use the green line (triangle symbols) to show the long-run aggregate supply curve (LRAS;) after the…

A: According to real business cycle theorists, INCREASE IN consumption resulting from the major…

Q: 1. Assume that there is economy with increasing of government expenditure and interest rate and…

A: Introduction

Q: An economy is described by the following equations: Desired consumption cd=130 +0.5(Y-T)-500r…

A: IS curve shows equilibrium in the goods market and LM curve shows equilibrium in the asset market

Q: 10. Which of the following are reasons why the short-run Aggregate Supply curve shown in the…

A: The curve that shows the aggregate quantity of goods and services supplied in a nation at different…

Q: Consider the ASAD model of a closed economy with zero ongoing inflation and workers misperceptions.…

A: Aggregate supply refers to the cumulative quantity of a firm's production and selling, or the real…

Q: (1) Draw a generic Aggregate Supply (AS) and Aggregate Demand (AD) curve on a set of axes. Label…

A: Goods market is in equilibrium where aggregate demand and aggregate supply intersect at certain…

Q: Suppose that the coronavirus pandemic (COVID 19) in 2020 has resulted in a leftward shift ofthe…

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

Q: Suppose that the coronavirus pandemic (COVID 19) in 2020 has resulted in a leftward shift of the…

A: Hey, thank you for your question. As per the honor code, we are allowed to attempt only first three…

Q: Discuss the main ideas for the Real Business Cycle (RBC) Revolution and the New Keynesian (NK)…

A: The real-business-cycle hypothesis believes that the economy's ability to transform inputs into…

Q: PLEASE ANSWER ALL PARTS OF QUESTIONS 1 AND 2.

A: Hey, Thank you for the question. According to our policy we can only answer up to 3 subparts per…

Q: AC.ADd 7. Draw the macroeconomy in equilibrium (snowflake). What happens when aggregate demand…

A: Aggregate demand(AD) is the total demand of goods and services for a given period in an economy. It…

Q: 1. In the RBC (Real Business Cycle) model, if businesses react to a pessimistic outlook and decrease…

A: Answer 1 : The correct answer is option D. The theory of RBC (Real Business Cycle) depicts that…

Q: Suppose that the coronavirus pandemic (COVID 19) in 2020 has resulted in a leftward shift of the…

A: First of all, we should know about aggregate demand (AD) and aggregate supply(AS). The total amount…

Q: 4. A large decline in government purchases: Suppose there is a large temporary decline in government…

A: Government spending alludes to cash spent by the public area on the securing of products and…

Q: Figure 2: Keynes’s AD-AS Model(Image nomrally goes here) 2.1. Changes in which factors could cause…

A: Aggregate Demand refers to the amount of sales proceeds which an entrepreneur actually expects from…

Q: Consider a modified aggregate supply function which takes account for the emergence of random…

A: The aggregate supply function of an economy can be represented by the adaptive expectations Phillips…

Q: 1.Draw Aggregate Demand, Short Run Aggregate Supply, and Long Run Aggregate Supply as if an economy…

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Q: 11. During a two-quarter period of the lockdown for the COVID pandemic, we observed a decrease in…

A: The aggregate demand curve shifts downward as the velocity of money decreases exogenously. Because…

Q: real business cycle theory suggest that _______ not important in explaining short-term fluctuations…

A: The Real business cycle theory states that the fluctuations in the economy are largely explained by…

Q: (g) Assume that the economy is now initially at equilibrium point Y, where the AD ; intersects the…

A: (g) Assume that the economy is now initially at equilibrium point Y, where the AD2 intersects AS2.…