In answering the question, you should emphasize the line of reasoning that generated your results; it is not enough to list the results of your analysis. Include correctly labeled diagrams, if useful or required, in explaining your answer. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes.
In answering the question, you should emphasize the line of reasoning that generated your results; it is not enough to list the results of your analysis. Include correctly labeled diagrams, if useful or required, in explaining your answer. A correctly labeled diagram must have all axes and
Assume that a country’s economy is in long-run equilibrium.
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Using a correctly labeled graph of aggregate
demand , short-runaggregate supply , and long-run aggregate supply, show the short-runequilibrium price level, labeled PL1, and output level, labeled Y1. -
Assume that increased uncertainty has reduced business orders for equipment. What is the impact of the change in business orders on each of the following in the short run?
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Aggregate demand. Explain.
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Employment
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Based on the change in business orders, what will happen to the long-run
economic growth rate? Explain. -
Using a correctly labeled graph of the loanable funds market, show the effect of the change in business orders on the real interest rate in the country in the short run.
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Given the effect on the real interest rate identified in part (d), what will happen to each of the following?
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The supply of the country’s currency on the foreign exchange market. Explain.
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The international value of the country’s currency
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