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an increase in the
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- Aggregate Supply Aggregate Demand Price Level rGDP Price level rGDP 115 620 100 660 640 120 110 650 125 660 640 120 130 680 130 630 140 700 140 620 150 712 150 610 160 722 160 600 170 730 170 590 You may find the “Centauri 2112" Excel file useful in your efforts. The AI that runs your actuarial department has calculated that, at any price level, Centauri's aggregate demand has the equation AD = 0.75(Y – T) + G, where Y is real GDP, T is total taxes, I is investment and G is government spending. Everything is measured in billions of 2099 Cents (denoted C). The government reports that taxes are T = 60 and government expenditures are G = 205. a) By how much will a 10-Cent decrease in taxes T increase Aggregate Demand? b) By how much will a 10-Cent increase in government spending G increase Aggregate Demand?. c) Which policy is a more effective way to change Aggregate Demand? d) Determine a policy that will return the Centauri economy to its long-run equilibrium. That is, figure out a…What happened to the Pe and Qe if the market supply increase by 5% at all price levels without any increase in deman?If the price level rises and the money wage rate rises by the same percentage, what happens to the quantity of real GDP supplied? Along which aggregate supply curve does the economy move?
- State whether the following statement is true or false Perfectly elastic aggregate supply means aggregate supply adjusts its up to all level of aggregate demand!!!The aggregate supply curve shows the relationship between real GDP and the average price level. O True O FalsePrice Assume that the housing market is in equilibrium in year 1. In year 2, the mortgage rate that banks charge consumers decreases, but producers are not affected. Also in year 2, the cost of lumber used to build homes decreases. Which of the following is most likely to be the equilibrium change? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a The equilibrium will be at point C before the change in expectations and point B after the change b The equilibrium will be at point A before the change in expectations and point B after the change с The equilibrium will be at point A before the change in expectations and point E after the change The equilibrium will be at point E before the change in expectations and point A after the change C 8 D S Quantity
- 4. Draw an ADAS graph at equilibrium. Suppose there is widespread fear of a recession. Which curve will shift? Draw the new equilibrium. Video HelpIf the aggregate demand is 300 + 50P and the aggregate supply is 100 + 60P calculate the value of PIf the price level increases in the economy, A) The aggregate demand will fall and shift to the left. B) The total spending in the economy will fall. C) The aggregate supply will fall and shift to the left. D) The total spending in the economy will rise.
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