Assume that the United States economy is currently in long-run equilibrium.a. Draw a correctly labeled graph of aggregate demand and aggregate supply and show each of the following.i. The long-run aggregate supply curveii. The current equilibrium output and price levels, labeled as YE and PLe, respectivelyb. Assume that the government increases spending on national defense without raising taxes.i. On your graph in part (a), show how the government action affects aggregate demand.ii. How will this government action affect the unemployment rate in the short run? Explain.C. Assume that the economy adjusts to a new long-run equilibrium after the increase in government spending.i. How will the short-run aggregate supply curve in the new long-run equilibrium compare with that in the initial long-run equilibrium in part (a) ? Explain.ii. On your graph in part (a), label the new long-run equilibrium price level as PL2:d. In order to finance the increase in government spending on national defense from part (b), the government borrows funds from the public. Using a correctly labeled graph ofthe loanable funds market, show the effect of the government's borrowing on the real interest rate.e. Given the change in the real interest rate in part (d), what is the impact on each of the following?i. Investmentii. Economic growth rate. Explain.P Type here to search%23ASS11012f7break13X&%2324103.5Y

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Assume that the United States economy is currently in long-run equilibrium. a. Draw a correctly labeled graph of aggregate demand and aggregate supply and show each of the following. i. The long-run aggregate supply curve ii. The current equilibrium output and price levels, labeled as YE and PLE, respectively

Assume that the United States economy is currently in long-run equilibrium. a. Draw a correctly labeled graph of aggregate demand and aggregate supply and show each of the following. i. The long-run aggregate supply curve ii. The current equilibrium output and price levels, labeled as YE and PLE, respectively

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The quantity of aggregate output demanded will fall if Select one: a. net taxes are reduced. b. the price level increases. c. government spending increases. d. Aggregate supply increases.
Amount of Real GDP Demanded, Billions $100 $ 200 $300 $ 400 $ 500 Price level 350 a. Use the data above to graph the aggregate demand and aggregate supply curves. Instructions: (1) Use the tools provided AD' and 'AS' to draw the aggregate demand and aggregate supply curves (plot 5 points total for each curve). To earn full credit for this graph, you must plot all required points for each curve. (2) Use the tool provided Eq' to indicate the equilibrium price level and the equilibrium level of real output. 300 250 200 150 100 50 Price Level (Price Index) 300 250 200 150 100 Amount of Real GDP Supplied, Billions $ 450 400 300 200 100 100 200 300 400 500 600 700 Real domestic output (billions of dollars) bition Tools AD Eq AS Instructions: Enter your answers as a whole number a. What are the equilibrium price level and the equilibrium level of real output in this hypothetical economy? Equilibrium price level= Equilibrium level of real output $[ billion is the equilibrium real output also…
Question 11 Draw the aggregate demand and aggregate supply curves and explain the following macroeconomics effect: 1. The price of oil increases. 2. Increase in taxes. 3. Increase in foreign wealth. Paragraph B IU A + ... > > >
Suppose that the White House decides to sharply reduce military spending without increasing government spending in other areas. a) Comment on the effect of this measure on aggregate demand. b) Show your answer graphically.
4.1 Why does the short-run aggregate supply curve slope upward? 4.2 Explain why the long-run aggregate supply curve is vertical. Then, (verbally and graphically) explain how each of the following events would affect the long-run aggregate supply curve. a. A lower price levels b. A decrease in the labor force c. A decrease in the quantity of capital goods d. Technological change
Need help with this. I gave possible answers(choose 1 only), also please show how to do the graph as well (where to move the new SRAS and AD if needed) Thank you!
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a. Beginning with long-run equilibrium, use the aggregate demand (AD) and aggregate supply (AS) model to explain (and illustrate) what happens in the short run when the economy suffers a negative supply shock. Be sure to detail what happens to aggregate demand, aggregate supply, the price level, the level of GDP, and unemployment.
Only typed answer and please don't use chatgpt
If a graph showed aggregate demand and short-run aggregate supply intersecting at $18 trillion of GDP, and the long-run aggregate supply curve was situated at $20 trillion of GDP, this would indicate that the economy was Select one: a. at full employment. b. experiencing high inflation. c. in a recession. d. in an expansion.
Can someone please help me solve a-c I'm very confused