Answered: For each of the following events, draw…

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter10: Dynamic Change, Economic Fluctuations, And The Ad-as Model

Section: Chapter Questions

Problem 10CQ

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For each of the following events, draw an aggregate-demand/aggregate supply diagram and explain the short-run effects on output and the price level in the U.S., assuming policymakers take no action.

(a) The United States Geological Survey (USGS) identifies largest continuous oil and gas resource potential in Texas.
(b) The federal government cuts income tax rates for individuals.
(c) The U.S. nominal exchange rate is unchanged, but prices rise faster abroad than in the United States.
(d) The Coronavirus outbreak causes disruption in supply chain and manufacturing operations around the world.
(e) A ten-year-old investment tax credit expires.

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