pajagei iagrams, 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. ssume the economy of Andersonland is in a long-run equilibrium with full employment. In the short run, nominal wages are fixed. a. Draw a correctly labeled graph of short-run aggregate supply, long-run aggregate supply, and aggregate demand. Show each of the following. i. Equilibrium output, labeled Y1 ii. Equilibrium price level, labeled PL1 b. Assume that there is an increase in exports from Andersonland. On your graph in part (a), show the effect of higher exports on the equilibrium in the short run, labeling the new equilibrium output and price level Y2 and PL2, respectively. c. Based on your answer in part (b), what is the impact of higher exports on real wages in the short run? Explain.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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n 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.
Assume the economy of Andersonland is in a long-run equilibrium with full employment. In the short run, nominal wages are fixed.
a. Draw a correctly labeled graph of short-run aggregate supply, long-run aggregate supply, and aggregate demand. Show each of the following.
i. Equilibrium output, labeled Y1
ii. Equilibrium price level, labeled PL1
b. Assume that there is an increase in exports from Andersonland. On your graph in part (a), show the effect of higher exports on the equilibrium in the short run, labeling the
new equilibrium output and price level Y2 and PL2, respectively.
c. Based on your answer in part (b), what is the impact of higher exports on real wages in the short run? Explain.
d. As a result of the increase in exports, export-oriented industries in Andersonland increase expenditures on new container ships and equipment.
i. What component of aggregate demand will change?
ii. What is the impact on the long-run aggregate supply? Explain.
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Transcribed Image Text:n 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. Assume the economy of Andersonland is in a long-run equilibrium with full employment. In the short run, nominal wages are fixed. a. Draw a correctly labeled graph of short-run aggregate supply, long-run aggregate supply, and aggregate demand. Show each of the following. i. Equilibrium output, labeled Y1 ii. Equilibrium price level, labeled PL1 b. Assume that there is an increase in exports from Andersonland. On your graph in part (a), show the effect of higher exports on the equilibrium in the short run, labeling the new equilibrium output and price level Y2 and PL2, respectively. c. Based on your answer in part (b), what is the impact of higher exports on real wages in the short run? Explain. d. As a result of the increase in exports, export-oriented industries in Andersonland increase expenditures on new container ships and equipment. i. What component of aggregate demand will change? ii. What is the impact on the long-run aggregate supply? Explain. В I prime videe N e Type here to search ASUS prt pause break f8 19 f10 f7 X 12 f6 E3 15 LLI 13 F4 LEGO % CC
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