**Exercise on Economic Equilibrium Adjustments**For each scenario, draw an economy in equilibrium, labeling the initial equilibrium price level and equilibrium quantity of Real GDP. Then, shift the appropriate curve and label the new equilibrium price and equilibrium quantity. Next, fill in the blanks to describe what happened.**(i) There is a decrease in wealth.***Graph Description:*- The graph is set to illustrate changes in an economy with a given initial equilibrium. You are required to depict how a decrease in wealth affects the economy.- The vertical axis typically represents the price level, while the horizontal axis illustrates Real GDP.*Fill in the Blanks:*- The price level will _____________ and Real GDP will _____________.**(ii) There is a decrease in productivity.***Graph Description:*- Similar to the above graph, this one charts an economic scenario with a decrease in productivity.- Ensure that appropriate shifts in the curves are demonstrated based on these changes.*Fill in the Blanks:*- The price level will _____________ and Real GDP will _____________.Use these scenarios to analyze how changes in wealth and productivity affect overall economic equilibrium.

(i) When there is decrease in wealth. When the wealth decreases, the consumption tends to falls…

3. For each question, draw an economy in equilibrium, labeling the initial equilibrium price level and equilibrium quantity of Real GDP. Then shift the appropriate curve and label the new equilibrium price and equilibrium quantity. Next, fill in the blanks to describe what happened. (i) There is a decrease in wealth. The price level will and Real GDP will 1 (ii) There is a decrease in productivity. The price level will, and Real GDP will

3. For each question, draw an economy in equilibrium, labeling the initial equilibrium price level and equilibrium quantity of Real GDP. Then shift the appropriate curve and label the new equilibrium price and equilibrium quantity. Next, fill in the blanks to describe what happened. (i) There is a decrease in wealth. The price level will and Real GDP will 1 (ii) There is a decrease in productivity. The price level will, and Real GDP will

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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