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- Show the impact of the increase in the price level by moving the point along the curve or shifting the curve. (?) PRICE LEVEL 180 150 120 90 60 30 0 0 20 Aggregate Demand 40 60 80 OUTPUT (Billions of dollars) 100 120 The change in the interest rate found in the previous task will lead to a in the quantity of output demanded in the economy. Aggregate Demand -O in residential and business spending, which will causeSuppose you are given the following information about an economy: Short run Aggregate Supply: SRAS = Y = 5000r+ 14,400 Long run Aggregate Supply: Aggregate Demand: Investment Spending: Consumption Spending: Government Spending: Net Exports (eX – iM): LRAS = Y* = 25,000 AD = Y=C+I+G+NX_ I = 4000 – 250r C = 1000 +0.75(Y – T) G = 2000 NX = 500 Taxes – Transfers: T = 2400 Monetary Policy: Money Demand: Money Market equilibrium: Fisher equation: where i is the nominal interest rate (i.e. when the interest rate is 7%, it means i= 7) r = 2 n м 3 20,000- 2000i M$ = MD i = r+T e. Find the short run equilibrium level of real GDP (Y), and inflation rate (t), in the short run. What is the output gap in the economy? Is it an expansionary or recessionary gap?PRICE LEVEL 160 150 140 130 120 110 100 90 80 0 с 1 d X a 2 3 4 5 REAL GDP (Trillions of dollars) 6 + 7 b H 8 (?) Identify which curve on the previous graph corresponds to each description in the following table. If the curve described does not appear on the graph, choose Not Shown. Description Short-run aggregate supply (SRAS) when there is a recessionary gap Aggregate demand (AD) Short-run aggregate supply (SRAS) when there is an inflationary gap Short-run aggregate supply (SRAS) when the economy is in long-run equilibrium Long-run aggregate supply (LRAS) a O b O O O с O O O O d O O Not Shown
- If households decide to save a larger portion of their income, what effect would this have on the output, employment, and price level in the short run? What about the long run?Suppose the people of Canada has reduced their spending on goods and services from the United States. What will be the effect on real GDP and the price level in the short run? In the long run? Show your results graphically.Suppose that because of globally adverse meteorological conditions, there are serious concerns of climbing prices in an extensive group of commodities. As a result, people now expect an acute increase in the level of input prices. The figure shows aggregate demand (AD), short‑run aggregate supply (SRAS), and long‑run aggregate supply (LRAS). Move one or more of these curves to describe the short‑run effect this would have in the economy and answer the two questions. Adjust graph in picture. In the short run, price level a. increases. b. decreases. c. The change is indeterminate. In the short run, real GDP (or aggregate output) a. The change is indeterminate. b. decreases. c. increases.
- In the above figure, for a shift from AD1 to AD2, the aggregate demand decreases by 1) 110. 2) 10.4. 3) 0.8. 4) 0.4.Am I Right. Hand written solutions are strictly prohibited.The full employment level of real GDP is $6 billion for the recently formed island nation of Turtleopolis. Use the line segment to show long‑run aggregate supply on the graph. Look at the image to adjust
- How would you draw an ADAS diagram showing an event that caused the aggregate demand to shift?( my example is how the federal government increased spending on national defense) Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Real-Time Data Analysis Exercise* "Real-time data provided by Federal Reserve Economic Data (FRED), Federal Reserve Bank of Saint Louis. Using data from the St. Louis Federal Reserve, analyze the effects of a positive supply shock. The U.S. economy experienced a supply shock with the spread of information communication technology and the Internet after 1995. Click the following link to view the Personal Consumption Expenditure price index data from FRED. i P1 Using the Series ID PCEPI, plot the the inflation rate from 1982 to 2007 as the percentage change in the Personal Consumption Expenditure price index from the same month in the previous year. Price level AS Q C The inflation rate for April of 2024 (shown as 2024-04-01 in FRED) was (Round your answer to two decimal places.) %. AD Y₁ Output The inflation rate for October of 1984 (shown as 1984-10-01 in FRED) was %. (Round your answer to two decimal places.)Over the past two years there has been a depletion of groundwater in thenation due to severe drought in the country. 1. Which of the two graphs above is correct? Explain why. 2. What happened to real GDP on the selected graph? Why? 3. What happened to the price level on the selected graph? Why? 4. What happened to the aggregate demand and the aggregate supply? Why?
