Answered: 18. Consider the IS curve in Figure…

18. Consider the IS curve in Figure 8.1. If the interest rate increases and there is a positive aggregate demand shock, the economy will move from point A to point (a) B (b) G (c) F (d) C (e) D

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Real Interest Rate R
It
(a) B
(b) G
(c) F
(d) C
(e) D
********
F
Figure 8.1 The IS curve
*************
0
A
E
18₂
B
D
ISA
1So
Short-Run output Ÿ
18. Consider the IS curve in Figure 8.1. If the interest rate increases and there is a
positive aggregate demand shock, the economy will move from point A to point

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Mm.39. Subject:- Economy
12 Because fluctuations in the world oil price make the U.S. short-run macroeconomic equilibrium fluctuate, someone suggests that the government should vary the tax rate on oil, lowering the tax when the world oil price rises and in- creasing the tax when the world oil price falls, to stabilize the oil price in the U.S. market. How would such an action influence aggregate demand?
2) Please answer the following parts: A. Describe the short-run effects of a rise in oil prices. B. Describe the adjustment to the long-run equilibrium. What variable should adjust for that to happen? C. Explain how the government should react in order to offset the effects of this shock on output. What will be the result regarding the price level? D. Explain how the Fed should react in order to offset the effects of this shock on output. What will be the result regarding the price level?
i need the answer quickly
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22. When the aggregate demand curve and the short-run aggregate supply curve intersect, A) the long-run aggregate supply curve must also intersect at the same point. B) inflation must be increasing. C) structural and frictional unemployment equal zero. D) the economy is in short-run macroeconomic equilibrium. 23. Interest rates in the economy have fallen. How will this affect aggregate demand and equilibrium in the short run? A) Aggregate demand will rise, the equilibrium price level will rise, and the equilibrium level of GDP will rise. B) Aggregate demand will rise, the equilibrium price level will fall, and the equilibrium level of GDP will rise. C) Aggregate demand will fall, the equilibrium price level will fall, and the equilibrium level of GDP will fall. D) Aggregate demand will fall, the equilibrium price level will rise, and the equilibrium level of GDP will fall.
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2. Explain what types of policies the Federal government actually implemented to restore aggregate demand and the potential obstacles policymakers may have encountered during the corona virus pandemic.
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29. Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo respectively, and AD1 and AS1 represent changes, which of the above graphs depict the work of Keynesian macroeconomic policy? a) Figures A & B b) Figures A & C c) Figures C & D d) Figures B & D
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20 AS1 AD1 5 10 Real GDP 15 20 Consider only the short run. The economy was operating at point A at end of year 1. The real GDP decreased by 1 from year 1 to year 2. Suppose you know that the aggregate demand remained the same throughout this period, what is the change in aggregate supply? Price Level 10 15