During the spring of 2016 the Midwestern U.S., which has a large agricultural base, experiences above-average rainfall. Draw the AD/AS diagram, what is the effect on output, the price level, and employment?
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During the spring of 2016 the Midwestern U.S., which has a large agricultural base, experiences above-average rainfall. Draw the AD/AS diagram, what is the effect on output, the price level, and employment?
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- Will the shift of SRAS to the right tend to make the equilibrium quantity and price level higher or lower? What about a shift of SRAS to the left?During spring 2016 the Midwestern United States,which has a large agricultural base, experiences aboveaverage rainfall. Using the AD/AS diagram, what is theeffect on output, the price level, and employment?Some politicians have suggested tying the minimum wage to the consumer price index (CPI). Using the AD/AS diagram, what effects would this policy most likely have on output, the price level, and employment?
- If new government regulations require firms to use a cleaner technology that is also less efficient than what they previously used, what would the effect be on output, the price level, and employment using the AD/ AS diagram?Using an AD/AS diagram (starting from long-run/full employment equilibrium), graphically show and verbally describe how each of the following events would affect the U.S. economy's equilibrium real GDP and price level. a. Discovery and implementation of new technology b. Mexico's economic growth increases faster than ours c. There is a general increase in the price of raw materials e. The cost of labor (wages) rises g. The price of oil is expected to fall d. The number of workers in the labor force decreases due to pandemic retirements/death f. A new Congress decreases government spending h. Consumer confidence fallsMarket Watch, May 24, 2018 discusses, "what happens if the oil rally turns into an 'oil shock' ". Graphically show the short- and long-term impact of this using the AD-AS model.
- The table below shows information on aggregate supply, aggregate demand and the price level for the imaginary country of Xurbia. Price Level AD AS 110 700 600 120 690 640 130 680 680 140 670 720 150 660 740 160 650 760 170 640 770 Plot the AD/AS diagram from the data shown (Don't have to show graph but do draw it to help you answer the questions). a. Identify the equilibrium. b. Imagine that as a result of a government tax cut, aggregate demand becomes higher by 50 at every price level. Identify the new equilibrium. c. How will the new equilibrium alter output? How will it alter the price level? What do you think will happen to employment?Suppose firms are optimistic about the outlook of the economy and they decide to increase investment. Also suppose that, simultaneously, there is a reduction in business taxes. Use the AD-AS graph to show what happens to the price level and output as a result.Suppose the U.S. Congress passes significant immigration reform that makes it more difficult for foreigners to come to the United States to work. Use the AD/AS model to explain how this would affect the equilibrium level of GDP and the price level.
- The imaginary country of Harris Island has the aggregate supply and aggregate demand curves as Table shows. Price Level: AD/AS Price Level AD AS 100 800 300 120 700 425 140 600 600 160 500 670 180 400 720 Plot the AD/AS diagram (You don't have to submit the plot, but I recommend doing it as it will help you with this problem). Identify the equilibrium. Blank #1 - Equilibrium Price Level Blank #2 - Equilibrium GDP Blank #3 - Would you expect unemployment in this economy to be relatively high or low? Blank #4 - Would you expect concern about inflation in this economy to be relatively high or low? Imagine that consumers begin to lose confidence about the state of the economy, and so AD becomes lower by 275 at every price level. Blank #5 - What is the new equilibrium GDP? Blank #6 - What is the new equilibrium Price Level? How will the shift in AD affect (answer is rise or fall)..The imaginary country of Harris Island has the aggregate supply and aggregate demand curves as Table shows. Price Level: AD/AS Price Level AD AS 100 800 300 120 700 425 140 600 600 160 500 670 180 400 720 Plot the AD/AS diagram (You don't have to submit the plot, but I recommend doing it as it will help you with this problem). Identify the equilibrium. Blank #1 - Equilibrium Price Level Blank #2 - Equilibrium GDP Blank #3 - Would you expect unemployment in this economy to be relatively high or low? Blank #4 - Would you expect concern about inflation in this economy to be relatively high or low? Imagine that consumers begin to lose confidence about the state of the economy, and so AD becomes lower by 275 at every price level. Blank #5 - What is the new equilibrium GDP? Blank #6 - What is the new equilibrium Price Level? How will the shift in AD affect (answer is rise or fall)... Blank #7 - the original output? Blank #8 - the price…The imaginary country of Harris Island has the aggregate supply and aggregate demand curves as shown in Table below. Price Level 100 120 140 160 180 AD 700 600 500 400 300 AS 200 325 500 570 620 a. Plot the AD/AS diagram with the axes labeled. Identify the equilibrium. b. Imagine that consumers begin to lose confidence about the state of the economy, and so AD becomes lower by 275 at every price level. Identify the new aggregate equilibrium. c. How will the shift in AD affect the original output, price level, and employment?