Draw an AD/AS model in purely competitive long run initial equilibrium. Label the price level P*=100and YF=10. Label the SRAS1 and the AD1 curve. Label the LRAS1 curve. Be sure to also label bothaxis correctly.]Draw a graph of the "business cycle." Show the long run growth trend line (put a trend percentage the"makes sense") and the cyclical curve around that trend line. Be sure to also label both axis correctly.Label point A on both graphs in #1 and #2 above. Then on graph in #1, indicate the full employment level(i.e., the "usual" unemployment rate in LR initial equilibrium) at point A for YF* (at full potential output)in initial equilibrium.Assume an Increase in AD for any reason (increase in Aggregate Demand) and show it on graph #1above. Then, Label point B on all applicable graphs above (after the increase in AD), at the intersection ofthe new equilibrium.-is point B a Short run or Long run equilibrium point?-Indicate the new unemployment rate at Point B that makes sense at YF2 and P2 (at the new equilibriumat point B) on the graph in #1. Also, use numbers for YF2 and P2 CPI that "make sense" on the graph in#1 above.indicate new numbers for point B that Make sense for the Nominal GDP growth equation (in #4 above)and business cycle (#2 above)write out the equation for GDP for the Expenditure approach that = Output = YF=AD= GDPwrite out the equation for Nominal GDP growth (use numbers that "make sense" for Point A, Point B,Point C like we did in class)-Equation:-Point A:-Point B:-Point C:

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Draw an AD/AS model in purely competitive long run initial equilibrium. Label the price level P*=100 and YF* 10. Label the SRAS1 and the AD1 curve. Label the LRASI curve. Be sure to also label both axis correctly.]

Draw an AD/AS model in purely competitive long run initial equilibrium. Label the price level P=100 and YF 10. Label the SRAS1 and the AD1 curve. Label the LRASI curve. Be sure to also label both axis correctly.]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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