Fill in the blanks to make the following statements correct. a. Macroeconomic equilibrium occurs at the intersection of b. If the AS curve is upward sloping, a positive AD shock will cause the price level to c. A positive AS shock will cause the price level to and real GDP to d. The simple multiplier measures the change in real GDP in response to a change in autonomous expenditure when the price level is constant. When the price level varies, the multiplier is than the simple multiplier. e. An increase in autonomous government spending is a upward sloping aggregate supply curve, there will be and determines equilibrium levels of and real GDP to VAD shock, which will initially cause in the price level, which leads to a partial ▼shift of the AE curve and a shift of the AE curve. shift of the AD curve. Given an

Fill in the blanks to make the following statements correct. a. Macroeconomic equilibrium occurs at the intersection of b. If the AS curve is upward sloping, a positive AD shock will cause the price level to c. A positive AS shock will cause the price level to and real GDP to d. The simple multiplier measures the change in real GDP in response to a change in autonomous expenditure when the price level is constant. When the price level varies, the multiplier is than the simple multiplier. e. An increase in autonomous government spending is a upward sloping aggregate supply curve, there will be and determines equilibrium levels of and real GDP to VAD shock, which will initially cause in the price level, which leads to a partial ▼shift of the AE curve and a shift of the AE curve. shift of the AD curve. Given an

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A drop in the price level will have what effect in the aggregate demand model and the income-expenditure model?A.decreases aggregate demand and planned expenditures.B.increases aggregate demand, but decreases planned expenditures.C.decreases aggregate quantity demanded, but increases planned expenditures.D.increases aggregate quantity demanded and planned expenditures.
Draw AS/AD curve with the initial curves represented with AS0 and AD0 and the equilibrium with point A.Then show the short run effect of a war with point B.Then add the short run effect of a decline in government expenditure with point C.Is the price level in point C definitely higher/lower than point A? Is the output level in point C definitely higher/lower thanpoint A?
A. Suppose you are given the following fixed-price Keynesian model: C=280 + 0.9Y. I-200 G=100 X3D200 M= 100 + 0.1Y. T= 100 a. Find the aggregate expenditure function. b. Find the equilibrium level of real GDP. C. What is the spending multiolier in this model? Tax multiplier? d. Show that leakages injections at equilibrium. e. If taxes increase by $100, what is the new equilibrium level of GDP? E. Show your answers to b) and e) graphically.
2) In 2008, financial frictions increased. Demonstrate the effect on AD using the MP and IS curves.
Use the Keynesian cross to predict the impact of the following on equilibrium income. Use dia- grams and explain your intuition. 1. An increase in government purchases. 2. An increase in taxes. 3. An equal increase in both government purchases and taxes.
Below graph these are 5 questions. Where equilibrium will shift to A or to B if : There is a rise in public sector borrowing There is a rise in government government subsidies to the motor industry The government spends less on defence The basic rate of income tax is raised The VAT rate is cut from 20% to 15%.
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of The economy of Langoria is currently in a state of long-run equilibrium in which the economy is producing at its Natural Real GDP. The level of Real GDP is currently 3 trillion dollars, and the price level is 130. 100 PRICE LEVEL 170 160 150 140 130 120 110 100 2 Changes in a Self-Regulating Economy AD AD₂ BRAS 1 2 3 LRAS 23
Which of the following sets of variable changes will all cause the IS Curve to shift to the right? A. A decrease in autonomous consumption, a decrease in government spending and an increase in financial friction. B. An increase in autonomous consumption, an increase in government spending and a decrease in financial friction. OC. An increase in autonomous consumption, a decrease in government spending and an increase in financial friction. D. A decrease in autonomous consumption, an increase in government spending and an increase in financial friction.
When the AD AS model is in short-run equilibrium Oa.AD and SRAS intersect and at potential GDP Ob.AD and SRAS intersect at a level of GDP greater than potential GDP OC. AD and SRAS intersect at a level of GDP less than potential GDP Od.Any of the above
In the Keynesian short-run macro model, a fall in the money supply will a)move the economy to the left along the aggregate expenditure line. b)shift the aggregate expenditure line downward. c)move the economy to the right along the aggregate expenditure line. d)shift the aggregate expenditure line upward. e)cause the aggregate expenditure line to rotate until it is flat.
Consider an AS AD diagram. What would happen in the model if Energy prices increased? Group of answer choices a. AD shifts right and prices increase while real GDP increases b. AS shifts left and prices increase while real GDP decreases c. AS shifts right and prices decrease while real GDP increases d. AD shifts left and prices decreases while real GDP decreases