I Graphical1. Economic analysis: Please mark the original AD as AD, and AS as AS. Show (whereverapplicable) the shift and mark the new AD as AD, and/or AS as AS₁.(a) Short-run impact of a positive wealth shock (b) Short-run impact of an increase in input costs[No need to show long-run AS curve][No need to show long-run AS curve]2. Policy analysis: Please mark the original AD as AD, and AS as AS- Show (whereverAD as AD, and/or AS as AS₁.applicable) the shift and mark the new(a) Short- and long-run impact of OMO sale(assume inflationary gap before the sale](b) Short- and long-run impact of Trump's taxcuts (assume initial equilibrium at potential GDP]3. Show the impact of the following on the equilibrium interest rate and money in the money markets(a) Economic growth(b) Higher discount rate by the Fed

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I Graphical 1. Economic analysis: Please mark the original AD as AD, and AS as AS. Show (wherever applicable) the shift and mark the new AD as AD, and/or AS as AS₁. (a) Short-run impact of a positive wealth shock (b) Short-run impact of an increase in input costs [No need to show long-run AS curve] [No need to show long-run AS curvel

I Graphical 1. Economic analysis: Please mark the original AD as AD, and AS as AS. Show (wherever applicable) the shift and mark the new AD as AD, and/or AS as AS₁. (a) Short-run impact of a positive wealth shock (b) Short-run impact of an increase in input costs [No need to show long-run AS curve] [No need to show long-run AS curvel

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

I Graphical
1. Economic analysis: Please mark the original AD as AD, and AS as AS. Show (wherever
applicable) the shift and mark the new AD as AD, and/or AS as AS₁.
(a) Short-run impact of a positive wealth shock (b) Short-run impact of an increase in input costs
[No need to show long-run AS curve]
[No need to show long-run AS curve]
2. Policy analysis: Please mark the original AD as AD, and AS as AS- Show (wherever
AD as AD, and/or AS as AS₁.
applicable) the shift and mark the new
(a) Short- and long-run impact of OMO sale
(assume inflationary gap before the sale]
(b) Short- and long-run impact of Trump's tax
cuts (assume initial equilibrium at potential GDP]
3. Show the impact of the following on the equilibrium interest rate and money in the money markets
(a) Economic growth
(b) Higher discount rate by the Fed

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Solutions for c,d and e