**Question 3:** Suppose that we observe a fall in the expected rate of return. Which graph most accurately shows how this would affect the aggregate demand - aggregate supply model? Note that the new curve is shown in gray.**Graphs Explanation:**- **a. AD curve shifts left:** - The graph shows a leftward shift of the Aggregate Demand (AD) curve, represented by the gray line. The original AD curve is in blue, and the Aggregate Supply (AS) curve is in red.- **b. AS curve shifts right:** - The graph depicts a rightward shift of the Aggregate Supply (AS) curve, with the gray line indicating the new position. The original AS curve is in red, and the AD curve is in blue.- **c. AD curve shifts right:** - This graph illustrates a rightward shift of the Aggregate Demand (AD) curve, shown as the gray line. The existing AD curve is colored blue, and the AS curve is red.- **d. AS curve shifts left:** - Here, the graph represents a leftward shift of the Aggregate Supply (AS) curve, indicated by the gray line. The previous AS curve is red, and the AD curve is blue.

The anticipated gain or loss from an investment by the investor is known as the expected rate of…

3. Suppose that we observe a fall in expected rate of return. Which graph most accurately shows how this would affect the aggregate demand - aggregate supply model? Note that the new curve is shown in gray. a. AD curve shifts left: b. AS curve shifts right: c. AD curve shifts right: d. AS curve shifts left:

3. Suppose that we observe a fall in expected rate of return. Which graph most accurately shows how this would affect the aggregate demand - aggregate supply model? Note that the new curve is shown in gray. a. AD curve shifts left: b. AS curve shifts right: c. AD curve shifts right: d. AS curve shifts left:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please answer the following questions: There are 2 correct answers:
Arrange these statements in sequence to explain why the short run aggregate supply (SR AS) curve slopes upward. Suppositions as a starting point Conclusion as to why the SR AS curve slopes upward Answer Bank At the macroeconomic level, the increase in aggregate demand (AD) corresponds to a shift in the firms' demand curve, whereas the firms'supply curve remains fixed. Since customers are demanding more of the firms'product, the firms' demand curves increase, which increases prices and output. The firms'willingness to supply more output at a higher price at a micro level shows a positive relationship, which is then also reflected at the macro level with an upward sloping SR AS curve.
start from d to f please
1. Discuss what factors shift the LRAS curve to the right (what increases long run aggregate supply). 2. Explain the following shifts by using the LRAS-AD diagram : a) Increase in both equilibrium real GDP and price level. b) A decrease in equilibrium real GDP and an increase in price level.
28. Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo, and AD1 and AS1 represent changes, which of the above graphs depict the economy's self-correcting mechanism at work? a) Figures A & B b) Figures A & C c) Figures C & D d) Figures B & D
3. Using aggregate demand and aggregate supply analysis, show the effects of the following (Assume neo-Keynesian AD and AS curves.): a. deflation b. an increase in investment spending c. an increase in the average wage rate d. an income tax cut
Explain the effect, if any, that each of the following occurrencesshould have on the aggregate demand curve.a. The Fed lowers the discount rate.b. The price level decreases.c. The federal government increases federal income tax rates inan effort to reduce the federal deficit.d. Pessimistic firms decrease investment spending.e. The inflation rate falls by 3 percent.f. The federal government increases purchases to stimulatethe economy.
2. The aggregate demand curve is best represented by which of the following equations? AD=C+I+G + NX AD=C+I+ G - NX AD=C+I+ G AD=C+I O AD=C+I- G - NX
8a. Assume that an economy is at equilibrium at its potential GDP at $10 trillion and aprice level of 100. What would be the short-run impact of a significant fall in consumer confidence about the future? Provide an AD/AS model to support your answer. b. What policy would you recommend to the chairperson of the Federal Reserve? Be specific. Show the effect of this policy on your graph part a. c. What are the major goals of the Fed's monetary policy?
7
Which of the following is an assumption of the aggregate demand-aggregate supply model? A. An economy is always at full-employment level in the short run. B. Capital stock cannot be varied in the short run. C. Producers are reluctant to change prices of their products even in the long run. D. Long-run aggregate supply curve slopes upward.
Suppose the government reduces the corporate income tax rate. This will increase the return to firms for investing, which should investment and cause in capital in the long run. Show the long-run effect of this reduction in corporate tax rates on long-run aggregate supply. 1.) Use the line drawing tool to show the effect on long-run aggregate supply, Properly label this lino, 2.) Use the point drawing tool to show the new long-run equilibrium on the graph. Label this point 'B'. Carefully follow the instructions above, and only draw the required objects. The long-run impact of a reduction in corporate tax rates would be OA a decrease in long-run potential output while actually reducing inflation.. OB. an decrease in long-run potential output while creating additional upward movements in prices. OC. an increase in long-run potential output while actually reducing inflation OD. an increase in long-run potential output while creating additional upward movements in prices. Price Level, P…