Explain by using the AD- AS diagram how in absence of any government intervention the economy may correct itself in the long run. ALso if suppose the government decides to intervene to steer the economy in the right direction. What kinds of policies would the government possibly take? Please show the impact of such policies on the economy using the AD-AS diagram

Q: Graphically explain recessionary and inflationary gaps using AD and AS curves.

A: The below graph slows the recessionary gap and inflationary gap:

Q: CNBC on Jan 26, 2022 reports, “Federal Reserve points to interest rate hike coming in March".…

A:

Q: Apply the AD/AS model to discuss whether or not discretionary increases in government purchases…

A: Expanded/ Increased government spending is probably going to cause an ascent in total interest (AD).…

Q: How do propensities and multipliers, and even expectations affect the outcomes in a downturn

A: In an economy, when talking about propensity, expectations and multipliers, these are the ratios of…

Q: As we have discussed in class, there was a collapse in housing markets and financial markets in…

A: Long Run Aggregate Supply (LRAS) refers to the total amount of goods and services that an economy…

Q: Based on the articles “Unemployment Claims Remain Historically High” and “US Consumer Spending Rose…

A: Unemployment refers to a situation where a person is willing to work but he/she doesn't get…

Q: Suppose most business executives expect a slowdown in the economy.  How might this situation affect…

A: Since , slowdown in an economy simply means the decline in the rate of growth of the very economy…

Q: The government announces a cut in the income tax rate. Use the AD/AS model to analyse the short-run…

A: AD-AS model determines the equilibrium GDP and price level in the economy.

Q: What impact would a decrease in the size of the labor force have on GDP and the price level…

A: ANS If the labor force decreases then less number of labors will be available to works and thus the…

Q: What is the role of daynamic in macroeconomic? What are the diffrence between static and daynamic?

A: Macroeconomic refers to the branch of economics that provides information about the overall…

Q: Assume that the Fed engages in a policy action that drives the economy above full employment. Use…

A: Fed, central bank controls money supply in the economy. It undertakes monetary policy to affect…

Q: Use the AD-AS model to explain the impact of a general increase in productivity on the general price…

A: In an economy, the AD-AS model explains the condition of a goods market and the price and quantity…

Q: Suppose concerns about the size of the federal budget deficit lead the U.S. Congress to cut all…

A: As technology growth falls, production becomes less efficient. This leads producers to produce less,…

Q: Using the AD-AS framework, demonstrate the impacts of spending on infrastructure and a tax cut on…

A: Answer - Equation of AD  Y = G + I + C-T + Ex - IM  Here,  Y = Output  G = Government spending  C =…

Q: During the spring of 2016 the Midwestern U.S., which has a large agricultural base, experiences…

A: The AD-AS model of macroeconomic equilibrium establishes the long-run aggregate output and price…

Q: PLEASE CREATE A GRAPH. There was a collapse in housing markets and financial markets in 2008. On the…

A: The macroeconomic framework known as the aggregate demand-aggregate supply (AD/AS) model shows the…

Q: Please draw a AD-AS model as to how whether a tax that improves people’s health could have any…

A: A macroeconomic framework called the AD-AS model explains how the economy's price level and real…

Q: Hayek says that markets will heal themselves and that government should not intervene. How does the…

A: The AD-AS model is a macroeconomic model that shows the relationship between the aggregate demand…

Q: Explain, using the AD-AS model, the effects of an increase in investment in the macroeconomy on the…

A: Macroeconomics is a sub-part of economics that is used to understand, the policies and fiscal…

Q: How do changes in consumer spending patterns impact the accuracy of short-term economic forecasting…

A: Consumer spending, often considered the backbone of many economies, reflects the total amount of…

Q: Apply current Australian economy to the AD/AS Model (Diagrams required) and determine which phase…

A: Oceania is a connected area with a number of governments and regions, each having its own economy.…

Q: Suppose the government of a typical developing country increased the salary of civil servants at a…

A: AD is negatively sloped while SRAS is positively sloped. The intersection between these gives the…

Q: If new government regulations require firms to use a cleaner technology that is also less efficient…

A: Aggregate demand: It refers to the total demand of an economy of various goods and services which…

Q: An event occurred in country C. The effects of the event can be described by the following AD-AS…

A: Understanding the AD-AS Model:AD Curve (Aggregate Demand): Represents the total quantity of goods…

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…

Q: Using the AD-AS model, which of the following statement better describe what has happened with the…

A: The aggregate demand level in the economy is used to describe the total amount of all the goods, and…

Q: In 2020, the COVID-19 struck and disrupted the world. As a result of this virus, we saw a decrease…

A: Introduction  The COVID-19 pandemic has led to a dramatic loss of human life worldwide and presents…

Q: The figure to the right illustrates the dynamic AD-AS model. Suppose the economy is in equilibrium…

A: Fiscal policy is the policy framed by government for regulating the economy by changing either…

Q: Suppose Mexico, one of our largest trading partners and purchaser of a large quantity of our…

A: Aggregate demand (AD) is the sum total amount of commodities and services demanded in an economy at…

Q: If workers look around and see prices rising more quickly than they had planned for, what is the…

A: Pay adjusted for inflation, or wages expressed in terms of the number of goods and services that can…