None If the US economy is currently experiencing weak real GDP growth (1.5%), highunemployment (7%), and rising inflation (4% and increasing), which AS/AD shock is the mostlikely cause of these symptoms?Short Run Aggregate Supply shifts upAggregate Demand shifts inAggregate Demand shifts outLong Run Aggregate Supply shifts out

The most likely cause of the symptoms mentioned in the question is an Aggregate Demand (AD) shift…

Answered: If the US economy is currently…

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

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Chapter20: Aggregate Demand And Supply

Section20.A: The Self Correcting Aggregate Demand And Supply Model

Problem 10SQ

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Aggregate demand curve of an economy is given by AD = 50 - 0.2P, the long-run aggregate supply, LRAS, is 30 and the short-run aggregate supply is given by SRAS = 0.3 P (all output measures are in US$ billions and the price level is given as an index number). A negative demand shock shifts the aggregate demand curve to the left. The new AD curve is given by AD = 49 - 0.2P. Find the new short-run equilibrium. Find the output gap as a percentage. What is the unemployment rate based on Okun's Law if the natural rate of unemployment is 4%? Short-run equilibrium: Price level is and the output is US$ billions Output gap as a percentage is: %. Unemployment rate is: %.
Draw and fully label an AD-AS model. Describe the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve in words. Why is one of these curves horizontal and the other vertical?
Use the AS-AD model to analyze the impact on the U.S. economy as a result of each of the listed events. Mention if AD and/or AS shift and in which direction. Also explain what the country will experience with respect to increase or decrease in short-run equilibrium real GDP and increase or decrease in the equilibrium price level. For each event, assume that the economy is originally in a full- employment equilibrium, mention if in the new equilibrium there is a recessionary gap or an inflationary gap. A) Congress raises income taxes. B) The Federal Reserve decreases the target for the federal funds rate. C) Migration to the US increases the working- age population. DJ Appreciation in the international value of the dollar.
Describe an economic environment which would be characterized by the term "stagflation". Using an AD - AS diagram, depict and given an example of a macroeconomic shock that would take an economy from a long - run equilibrium to a situation of stagflation. Label all points on the graph completely and point out the key characteristics associated with stagflation on your graph.
Oil price shocks have an evident impact on the short run aggregate supply curve. With the help of a graph demonstrate how rising oil prices affect the SRAS and explain what other factors can cause this shift.
please find the attached hom-work questions
The graph below depicts an increase in aggregate demand due to an increase in net exports. This increase in aggregate demand is depicted as a shift from AD to AD₁. Price Level LRAS X AD Real GDP AS AD Tools AS, 0 a. In the long run, aggregate supply will adjust to move the economy back to the full-employment level of output. Show this shift using the graph above. Instructions: Use the tool provided "AS₁" to show the movement back to full-employment output. Plot only the endpoints of the line, keeping AS, parallel to AS with the appropriate Intersection (2 points total). b. How does the new long-run equilibrium compare to the Initial full-employment level before the Increase in net exports? O The price level is higher, but output is lower. O The price level is lower, but output remains the same. O The price level is lower, but output is higher. O The price level is higher, but output remains the same.
can i get these both solved with a graph please
Please no hand written solution For the following events, explain the short-run and long-run effects on output and the price level, assuming policymakers take no action. You need to draw the AD-SRAS-LRAS diagram for the Canadian economy, starting in a long-run equilibrium. Make sure to illustrate its effect using a well-labeled diagram. Assume that there is a large increase in demand for Canadian exports. Show the resulting short-run equilibrium on your graph. In this short-run equilibrium, is the unemployment rate likely to be higher or lower than it was before the increase in exports? Explain it. Explain how the economy adjusts back to long-run equilibrium. When the economy has adjusted back to long-run equilibrium, how would the values of each of the following have changed relative to what they were before the increase in exports? Real GDP The price level (CPI) The unemployment rate
For each scenario listed below, start by drawing a fully-labeled Aggregate Supply-Aggregate Demand diagram of an economy in long-run equilibrium. Then, shift the appropriate curve(s) – either AD or SRAS – dictated by the events given. Third, identify the short-run and long-run effects of each event on the price level, P and the real output, Y. a. The Federal government increases spending on national defense. b. Suppose that U.S. trading partners (e.g., China or Germany) impose a tax/tariff on US exports to these countries.
a. write down the expressions for the AS and AD curves and interpret the expressions. what is the intuition behind the two curves? what must be true of the model parameters and variables in the long run equilibrium? b. analyze the effects of an oil supply shock that causes a temporary increase in the inflation, using the three-equation model. assume that the shock lasts for one period and then assumes the value 2%. describe the mechanisms that bring the economy back to long-run equilibrium. what happens to aggregate supply? c. consider an economy that starts out in steady state when the central bank decides to make the inflation target more ambitious. analyze the effects of a decrease in the inflation target from m to mt. explain the mechanism behind the adjustment to the new steady state.
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