Classify each of the following as a supply shock or a demand shock. Use a graph to show the effects on inflation and output in the short run and in the long run: a. Households and firms become more optimistic about the economy. b. Favorable weather causes an increase in crude palm oil production in Malaysia. c. Typhoon Rai hit Philippines and caused a massive destruction of houses and 400 death tolls

Q: A.W. Phillips concluded that there is a trade-off between the inflation rate and the unemployment…

A: Phillips curve shows the relationship between inflation and Unemployment which is inversely related…

Q: At the beginning of the fiscal year the labour union was able to negotiate a 1% increase in wages.…

A: At the end of the year, wages increases by 1% and inflation increases by 3%. Hence, the money wage…

Q: What makes the 2007-2009 recession special?  1. because of the length of the recession 2. because of…

A: Great recession and the causes is complex and involve several forces.

Q: In the short run, the decrease in investment spending associated with business pessimism causes the…

A: The curve that depicts various quantities of goods and services being demanded at various levels of…

Q: In chapter 2 of your book "Understanding Business", in the box "Reaching Beyond Our Borders," the…

A: Inflation rate: The inflation rate refers to the average growth rate of an economy's overall price…

Q: Which of the following events is likely to increase unemployment and drive the price level down?…

A: Unemployment refers to a situation in which the people of a nation who are ready and able to do a…

Q: In the following examples, is inflation creating winners and losers at no net cost to the economy or…

A: Inflation implies a consistent elevation in the general price level of goods and services. Commonly…

Q: On a graph, show the impact of the permanent supply shock on unemployment and inflation in the long…

A: A abrupt and enduring shift in the availability of a resource or good can have an impact on the…

Q: True or False Since people buy a lot of food and oil (gasoline), we should pay most attention to…

A: Approach to solving the question: The student ought to think about inflation holistically including…

Q: Use the model of aggregate demand and short run aggregate supply to explain how each of the…

A: Below is the AD and AS graph.

Q: Suppose that between 2005 and 2006 GDP in Japan, measured using constant, year-2000 prices, grew at…

A: GDP is the gross domestic product. GDP is the Market value of all the final goods and services…

Q: a. What increase in aggregate demand is necessary to achieve this? billions. b. If successful, what…

A: Recession is when the economic growth of the country is decreasing due to which the productivity,…

Q: Which of the following questions are macroeconomic questions?     A. What factors determine the…

A: Meaning of Economics: The term economics refers to the situation under which there remain…

Q: For each of the following events, explain the short-run and long-run effects on output and the price…

A: Short run is the time period when both fixed costs and variable costs are operational. In the long…

Q: Draw a graph that shows inflation and that the output is increasing and label PL's, GDP's, AD and…

A: Aggregate Demand (AD) and Aggregate Supply(AS) Framework: The AD/AS model is one of the fundamental…

Q: 1. Using an example, explain how John Maynard Keynes distinguished macroeconomics from…

A: Inflation is a condition in the economy when there is a general rise in the price level of goods and…

Q: Which of the following are true  1. Inflation squeezes profits. 2. Firms raise prices to offset…

A: Answer is given below

Q: A worldwide drought has reduced food production. Inflation has increased, unemployment has risen…

A: a.Because of increase in aggregate demand,output will increase.Because of increase in output,price…

Q: Consider the short run and the long run and then choose the statement that is correct.  A. The…

A: The money supply is a term you may or may not be familiar with. This refers to all of the liquid…

Q: (Please attach a graph showing your work for each question) Suppose that the oil price sharply…

A: Meaning of Aggregate Demand and Aggregate Supply: The term aggregate demand refers to the…

Q: What three factors affect long-run aggregate supply? ​A. Natural Resources, Technology, and…

A: In the long run there are three factors that affect aggregate supply.

Q: 2. Explain why E=Y and M.V=P.Q are equivalent to each other but can be used to give different…

A: E represents the expenditure or total spending in the economy. Y represents the total income earned…

Q: he Federal Reserve Bank of Atlanta releases its monthly Wage Growth Tracker to study trends in wages…

A: During a recession, job stayers do better than job switchers because labor demand decreases and job…

Q: Suppose the evening news anchor announces that "The Bank of Canada Raises the Target Overnight Rate…

A: Target overnight rate is the interest rate at which banks borrow and lend from one another in the…

Q: If the dollar falls in value compared to other currencies, what will happen in the United States?…

A: When the dollar value depreciate compared to other currencies, then the US goods become less…

Q: Read the news clip, then answer the following questions. inflation when it discusses The news clip…

A: Macroeconomic monitoring will remain critical since it determines the path and duration of economic…

Q: Which is the correct order once the AD or SRAS has shifted to start the inflation process? a.…

A: A shift of the AD or SRAS has shifted to start the inflation implies a rightward shift of the…

Q: What happened to the demand for rental cars during the first half of 2021? I.e., was there a…

A: The objective of the question is to understand the change in demand for rental cars during the first…

Q: Which of the following events could cause stagflation? a. The Federal Reserve increases interest…

A: The state that arises when there are high rates of inflation and slow economic growth occurring at…