Answered: 4. Now please graph what that…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 27RQ: Name some factors that could cause the SRAS curve to shift, and say whether they would shift SRAS to...

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Scenario:

The bill includes $130 billion to allow for a return to full-time, in-person teaching at K-12 schools.
assistance to small busines, landlords and renters: 30 Billion
Obomacare Expansion: 34.2 Billion
Child Tax Credit Boost: 110 Billion
Vaccine Distribution: 160 Billion
school credit: 1 Billion
Coronavirus Preparedness and response supplemental appropriation act: 8.3 Billion
Families first coronavirus reposne act 225 billion
paycheck protection program: 483 Billion
Consolidated appropriations act: 920 Billion

So we just had one of biggest (if not THE biggest) actions of Fiscal Policy. Now using the Agg Model, you will explain what is happening now...

Now please graph what that anticipated impacts of the Biden Covid bill on the Agg Economy. Please label both axis, insert AD (AD-2), draw the initial LRAS (as LRAS-1) and SRAS (as SRAS-1) (ie before the pandemic) and the initial equilibrium/expansion/recession (Real GDP-1). Then draw a new the new graphs that you represent the impact of the Biden Covid Bill over the next 6-12 months. Label each new curve/location as “name-2”.

4. Now please graph what that anticipated impacts of the Biden Covid bill on the Agg Economy.
Please label both axis, insert AD (AD-2), draw the initial LRAS (as LRAS-1) and SRAS (as
SRAS-1) (ie before the pandemic) and the initial equilibrium/expansion/recession (Real GDP-1).
Then draw a new the new graphs that you represent the impact of the Biden Covid Bill over the
next 6-12 months. Label each new curve/location as "name-2".
0
5. Based upon the above, what happens to the aggregate economy because of the Biden Covid
Bill?

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