Confused and not sure what's correct **Title: Understanding Aggregate Demand and Supply in the Economy of Marjan****Graph Description**In the year 2020, the fictional country of Marjan has its aggregate demand and aggregate supply represented on a graph. The graph features:- **Axes**: - The x-axis represents Real GDP in trillions of dollars. - The y-axis represents the Price Level.- **Curves**: - **AD2020**: The initial aggregate demand in 2020, depicted as a downward sloping orange line. - **AS**: Aggregate supply, shown as an upward sloping blue line. - **SRAS**: Short-run aggregate supply, another upward sloping blue line. - **AD**: Aggregate demand in 2021 is depicted as two potential curves, referred to as ADA (left) and ADB (right).- **Points of Interest**: - Point A marks the intersection of ADA with AS. - Point B marks the intersection of ADB with SRAS.- **Additional Elements**: - The LRAS (Long-Run Aggregate Supply) is to be plotted using a green line with a triangle symbol at a Real GDP of $6 trillion. - Outcome C is marked near the intersection of the initial AD2020 curve with AS.**Economic Analysis**Economists suggest that if the government does not intervene, the aggregate demand in 2021 will be given by the ADA curve, resulting in an outcome at Point A. This assumes continued growth at the current rate. However, if the government implements expansionary policies, the aggregate demand will move to the ADB curve, reaching an outcome at Point B.Two possible scenarios are considered:- **Point A**: - Unemployment Rate: 6% - Inflation Rate: To be calculated- **Point B**: - Unemployment Rate: 3% - Inflation Rate: To be calculatedThe task is to calculate the inflation rate for each potential outcome (A and B) between the initial price level of 102 and the levels at outcomes A and B, with precision up to two decimal points.**Instruction**Use the provided graph to assist in calculating the required inflation rates. The nominal task doesn't involve grading based on adjustments to the graph.This section aims to facilitate understanding of how projected government actions and economic growth impacts the economy's price level and employment status. **Title:** Understanding the Phillips Curve: A Guide**Graph Explanation:**The graph displays the relationship between the unemployment rate (x-axis) and the inflation rate (y-axis). Two lines are shown:- **SRPC (2021)**: This line represents the Short-Run Phillips Curve for the year 2021.- **LRPC**: This line denotes the Long-Run Phillips Curve.**Text Explanation:****Instructions:**Use the graph to answer the following questions. (Note: You will not be graded for any adjustments made to this graph.)**Questions:**1. **Short-Run Phillips Curve:** - Use the black line (plus symbol) to represent the Short-Run Phillips Curve for the economy in 2021 (SRPC2021). - The short-run Phillips curve illustrates: - Representing the tradeoff between unemployment and inflation - At Natural Real GDP - At the natural rate of unemployment2. **Long-Run Effects:** - Consider the long-run effects of the policy. Suppose that after implementing the policy, the aggregate demand curve remains at ADb. Designate the long-run equilibrium following this policy as outcome C.3. **Graphic Elements:** - Returning to the first graph, place the grey point (star symbol) at outcome C. - Since the output at point C is at Natural Real GDP, the unemployment rate at outcome C is at the natural rate of unemployment.4. **Long-Run Phillips Curve:** - Use the green line (triangle symbol) to draw the Long-Run Phillips Curve (LRPC) on the graph. - This line represents: - At the natural rate of unemployment - At Natural Real GDP**Conclusion:**Understanding the interaction between inflation and unemployment through the Phillips Curve helps in analyzing economic policies and their long-term impacts.

According to the Phillips curve, unemployment and inflation have a steady inverse connection. The…

In the year 2020, aggregate demand and aggregate supply in the fictional country of Marjan are represented by the curves AD2020and AS on the following graph. Suppose Natural Real GDP in this economy is $6 trillion. On the following graph, use the green line (triangle symbol) to plot the long-run aggregate supply (LRAS) curve for this economy. PRICE LEVEL 107 103 102 101 100 O AD 2020 A B SRAS 2 4 6 8 REAL GDP (Trillions of dollars) 10 AD AD 6% 3% 12 B 14 Economists have forecast that if the government does nothing and the economy continues to grow at the current rate, aggregate demand in 2021 will be given by the ADA curve, resulting in the outcome illustrated by point A. If the government pursues an expansionary policy, aggregate demand in 2021 will be given by the ADB curve, resulting in the outcome illustrated by point B. LRAS The following table gives projections for the unemployment rates that would occur at point A and point B. Consider what the rate of inflation would be between 2020 and 2021, depending on whether the economy moves from the initial price level of 102 to the price level at outcome A or the price level at outcome B. Outcome C Complete the table by entering the inflation rate at each potential outcome point. Note: Calculate the inflation rate to two decimal points of precision. Unemployment Rate Inflation Rate % % Use the following graph to help you answer the questions that follow. (Note: You will not be graded for any adjustments made to this graph.)

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC