Draw AS/AD curve with the initial curves represented with AS0 and AD0 and the equilibrium with point A. Then show the effect of a rise in government expenditure with point B. Then show the long run adjustment with point C. Explain it in details.

Q: How much would the government have to change spending to close the gap?

A: There is multiplier effect occur in the economy so there is no need to send the same amount of…

Q: Determinants of aggregate demand The following graph shows a decrease in aggregate demand (AD)…

A: The changes in the determinants that will lead to a fall in aggregate demand are:Consumer…

Q: Refer to the figure above. As a result of the shift in aggregate demand from ADO to AD1, equilibrium…

A: A model used in macroeconomics is the (AD/AS) model. It clarifies how an economy's price level and…

Q: Moving to another question will save this response. Question 24 A leftward shift in aggregate supply…

A: A leftward shift in AS that is a result of decrease in aggregate supply.

Q: Refer to the figure below. Price LRAS Level 1 SAAS, SAAS, ADI Quantity of Output Suppose the economy…

A: Macroeconomic equilibrium is a state of the economy in which aggregate demand equals aggregate…

Q: None

A: The longrun aggregate supply curve (LRAS) curve represents the potential level of output. In the…

Q: Consider that the macroeconomy is hit by aftershocks. Exports decrease by $40 billion and imports…

A: Since you have posted multiple questions, we will provide the solution only to the first question as…

Q: Carefully explain why the price level are rigid in the short run (SR).  Illustrate your answer using…

A: The price level are rigid in the short run. This can be explained as follows :

Q: escribe how a decrease in government defense spending causes the AD curve to shift. What is the…

A: A decrease in government spending on defense causes a shift in the aggregate demand (AD) directly…

Q: You will draw four separate Aggregate-Demand/Aggregate-Supply graphs.  Each graph will have one…

A: An AD-AS graph is a macroeconomic model that shows the relationship between aggregate demand (AD)…

Q: An Aggregate Expenditure model with AS = 2p + 20 – 2W and WO = 10, C = 26 + 0.8(Y – 20 – .25Y), -…

A: here we calculate the price level after the net export increases so this export create a shock in an…

Q: Graphically derive and explain the AD curve

A: Aggregate demand is an economic measurement of the total amount of demand for all finished goods and…

Q: Consider the AD-AS model where the economy is currently at point A. Show the short-run effect of a…

A: The government regularly interferes in the market to prevent any malpractices like a decrease in…

Q: Figure 15.1 Price level 8 O O O O LRAS C A Y₁ D AD₂ SRAS1 AD₁ SRAS₂ Real GDP (billions of dollars)…

A: Aggregate Demand is the sum of consumption, investment, government spending and net export.  The…

Q: The graph shows an economy's aggregate supply and potential GDP. On the graph, draw an aggregate…

A: Full Employment equilibrium refers to a point where full resource utilization is achieved. It is a…

Q: AD 45° AD₁ =C+I+G+NX the Pl Y₁ ct of the following on the AD curve and equilibrium output Y. Draw…

A: The total quantity of demand for all completed items and services produced in a given economy is…

Q: Question M9.2 Unanswered •1 attempt left If the AD curve is given by GDP, = 73 – (5×P), and segment…

A: Given:  AD Curve : GDPD=73-(12xP) AS Curve: Y=-2123+(13xP)

Q: Suppose an economy is at the short run equilibrium which its current output level called Y1, is…

A: The economy is at the short run equilibrium at income Y1 and the price level P1. At this point,…

Q: antity of Output SuppliedQuantity of Output Supplied  =  =  Natural Level of Output+α×(Price…

A: SOLUTION IS GIVEN BELOW

Q: Refer to the information provided in Figure below to answer the question(s) that follow. AS2 AS ASo…

A: The decline of government spending causes the aggregate demand curve to shift left.

Q: Suppose the relationship between price level and aggregate demand in an economy is given by this…

A: The economics as a study is based upon the idea that the resources with the economies, or the…

Q: Imagine that in the year 2025, China’s economy increases significantly, causing an increase in…

A: The income of a person and their consumption are directly related. If the income of a person rises,…

Q: Explain the effect of an increase in exports on the equilibrium GDP in the Keynesian…

A: An economy is supposed to be at its balance level of pay when total inventory and total interest…

Q: question 1: In Figure 1 , how does the AD-AS model reflect the idea that governments cannot…

A: A macroeconomic model is the AD-AS, or aggregate demand-aggregate supply model. The aggregate…

Q: las 140 120- 1004 LRAS SRAS

A: The graph above shows the short run aggregate and long run aggregate supply curve. when hurricane…

Q: In the above figure, the short-run macroeconomic equilibrium is at the price level ________ and the…

A: The point at which the amount of real GDP demand equals the amount of GDP supply is the short run…

Q: How would you define price stickiness? How does this phenomenon lead to an increase in the short run…

A: Price stickiness is the situation in which price adjusts by itself and stays same for a certain…

Q: Question 2 Answer the following questions clearly. a. What are the characteristics of AD? Derive the…

A: As economies and societies developed, the study of economics got more complicated. Hence, as a…

Q: Discuss the impact of taxes and autonoumous consumption on the price level.

A: Collection of tax moves the market to another point of equilibrium where the price of a commodity…

Q: he marginal propensity to consume (mpc) is 0.8. In addition, government spending increases by $200…

A: The marginal propensity to consume is 0.8=> MPC =…

Q: Determine whether the ad or as curve with shift with each scenarios below. Each situation is…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: What is income-expenditure equilibrium? Derive aggregate demand curve from income expenditure…

A: Aggregate demand refers to the sum total of all individual goods and services demanded.The aggregate…

Q: Which of the following will NOT cause a shift of the AS curve? Changes in non-labour O Changes in…

A: Aggregate supply is the total supply of goods and services in an economy while aggregate demand is…

Q: Refer to the graph shown. In the graph, a recessionary gap exists if the price level is: LAS AD₁ AD₂…

A: Aggregate supply is an economy's gross domestic product (GDP), the total amount a nation produces…

Q: Suppose that the economy is at full employment, the price level is 100, and the multiplier is 3.…

A: The GDP investment multiplier at full employment indicates how changes in investment spending affect…

Q: Suppose that the government engages in expansionary fiscal policy by increasing government spending.…

A: Fiscal policy is the tool used to government to change the aggregate demand by changing either…

Q: Price Level ADO bc Real GDP Refer to the figure above. If aggregate supply is AS, and aggregate…

A: Aggregate demand is the sum of consumption,  investment,  government spending and net export. This…

Q: Will the shift of SRAS to the right tend to make the equilibrium quantity and price level higher or…

A: The total supply of goods and services that companies in a national economy expect to sell over a…