3. are economists who generally emphasize the importance of aggre supply in determining the size of the macroeconomy over the (A) Keynesian economists; long run (B) Keynesian economists; short run (C) Neoclassical economists; long run (D) Neoclassical economists; short run
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- Suppose that the coronavirus pandemic (COVID 19) in 2020 has resulted in a leftward shift of the aggregate demand curve (it has also shifted the short-run aggregate supply to the left, but let’s ignore this effect here for simplification). A. Use the aggregate-demand/aggregate-supply model to show the effects on output and the price level/inflation in both the short run and long run (assume that the short-run aggregate supply curve is upward sloping). B. Show the adjustment process of the economy from the short run to the long run. C. What is the effect on unemployment in short run and long run? D. Can policymakers use monetary policy (and/or fiscal policy) to accommodate this shock? Describe what happens to the economy in response to this policy action.Attached: figure 1: Hayek’s (Classical) AD-AS Model Question 1 Why does Hayek’s aggregate supply curve always lead to an equilibrium level of national output equal to the full-employment level of real GDP? Question 2 Hayek says that markets will heal themselves and that government should not intervene. How does the AD-AS model reflect Hayek’s idea that governments cannot increase real GDP beyond the level that the free market economy is able to produce? Question 3 Do you believe that the Hayek’s classical AD-AS model explain the factors that cause changes (shifts) in AS realistically? Why or why not?2) Use the table above to answer the following questions.a) What is the value of real GDP and price level at the long run macroeconomic equilibrium?b) What is the value of real GDP and price level at the short run macroeconomic equilibrium?c) Is the short-run macroeconomic equilibrium a full-employment equilibrium, below full-employment equilibrium, or above full-employment equilibrium?d) How will this economy return to its long run equilibrium? Explain using self-correctingmechanism.
- Draw and properly label an AD-AS model to show Keynesian, intermediate, and neoclassical zones. Then, briefly explain the levels of unemployment, inflation and real GDP in each zone, and also confirm whether all three goals of a macro economy are being achieved in each zone. 2. Draw and properly label the AD-AS graphs or one AD-AS graph to show recessionary and inflationary gaps. Then, discuss in detail how Keynesians suggest that recessionary and inflationary gaps be closed. 3. Draw and properly label AD-AS graphs or one AD-AS graph to show recessionary and inflationary gaps. Then, discuss in detail how neoclassicals suggest that recessionary and inflationary gaps be closed.1. Which of the following is not an assumption of the simple Keynesian ? (a).We are in the short run (b). Prices are constant (c).Output is demand -determine (d). Output is supply -determine (e). Aggregate output is equals planned expenditure 3. Equilibrium in the market for bank reserves determine. 4. The consumer prices index (CPS) baskets of goods typically consumed in period 2 goods .How do Classical economists and Keynesian economists differ in their perceptions of how well markets and prices function? List and briefly explain the nature and functions of three market arenas. Which are the four components of the macroeconomy? Explain the interaction between these components through a circular flow diagram. Draw a graph of a business cycle. Label and explain each phase of the business cycle. Define the following concepts: Sticky Prices Expansion and contraction Inflation, Deflation and Hyperinflation Fiscal Policy and Monetary Policy
- es s in Assume the following macroeconomic conditions in the United States and that US policy makers desire to achieve their three macro-policy goals defined in the usual way. A. Output has risen above potential output, creating a large positive output gap. B. The employment rate has risen, creating an unemployment rate of 3%. C. The inflation rate has risen to 8% per year. Which statement is CORRECT? Output is too high; the unemployment rate is too low; and the inflation rate is too high. Output is too low; the unemployment rate is too low; and the inflation rate is too high. Output is too high; the unemployment rate is too low; and inflation rate is too low. Output is too high; the employment rate is too low; and the inflation rate is too low. Output is too high; the employment rate is too low; and the inflation rate is too high. OO4. A large decline in government purchases: Suppose there is a large temporary decline in government purchases in the economy, financed by an unspecified decline in future lump sum taxes. (a) Analyze the effect of the shock in the labor market diagram of a standard DSGE model (with no sticky prices or wages). What is the effect on the real wage and employment in the short run? (b) How would your answer change if there are sticky prices? (c) Discuss how your answer relates to the impulse response functions shown in Figure 15.12. (Hint: That figure is for an increase in government pur- chases, so you need to switch the sign of the effects in that figure.) FIGURE 15.12 The Dynamic Effects of a Shock to Government Purchases Percent change Percent change 1 GDP 0.5 0.5- 0 Consumption -0.5 15 20 10 Quarters after the shock 0 -0.5- 5 Percent change 0.7 0.6 0.5- 0.4- 0.3- 0.2 0.1 0 0 5 Hours worked 20 10 15 Quarters after the shock 5 Percent change 0.4 0.3- 0.2 0.1 0 0 5 10 15 20 Quarters after…Use AD and AS curves to explain the effects on the equilibrium price level and equilibrium level of output in the short run.(a) An expansionary fiscal policy with the economy operating near full capacity. (b) A contractionary monetary policy during a period of high unemployment and excess industrial capacity. (c) A strong hurricane destroys energy plants which cause energy prices to increase, assuming that the Fed attempts to keep interest rates constant by accommodating inflation. (d) The federal government pursues a contractionary fiscal policy while the Fed acts to keep output from falling.
- Sub : EconomicsPls answer very fast.I ll upvote. Thank You 3)- Consider if in a given economy, the parliament approves an increase in minimum wage. Starting from the medium run equilibrium, when economy is at full employment to discuss the effects of this shock. a)- Using a set of WS/PS curves, and only in labor market, in step by step way, explain the impacts. b)- Using the aggregate supply and demand (AS/AD), and IS/LM curves, show the short and medium run equilibrium points. [No explanation, only neat and well-marked graphs are acceptable]1) Identify key assumption underlying Keynesian and Classical approaches to macroeconomic analysis. In your answer indentify how Keynesian and CLassical economist differ regarding understandign about the business cycle and how the economy should best be managed ?