Price level (GDP price index 2012-100) Pecencial AS 130 GDP 120 110 100 90 AD 165 19.0 193 200 20.3 210 Red GDP (en of 2012 dollars) The economy is at the equilibrium shown as point a in the above figure. To restore the economy to potential GDP, the Fed should in aggregate demand. interest rates, leading to a(n) decrease; decrease

Price level (GDP price index 2012-100) Pecencial AS 130 GDP 120 110 100 90 AD 165 19.0 193 200 20.3 210 Red GDP (en of 2012 dollars) The economy is at the equilibrium shown as point a in the above figure. To restore the economy to potential GDP, the Fed should in aggregate demand. interest rates, leading to a(n) decrease; decrease

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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F5
Price level (GDP price Index 2012-100) Pocential AS 130 GDP 120 110 100 90 AD 19.0 195 20.0 20.5 21.0 21.5 Real GDP (trillons of 2012 dollars) In the figure above, the economy is at an equilibrium with real GDP of $20 trillion and a price level of 110. As the economy moves toward its ultimate equilibrium, the curve shifts because O a. aggregate supply; leftward; the money wage rate rises O b. aggregate supply; rightward; the money wage rate falls O c. aggregate demand; leftward; the money wage rate rises d. potential GDP; leftward; the money wage rate falls O e. aggregate demand; rightward; the money wage rate falls
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macroeconomics - gdp
Price level (GDP priceindex) Real GDP demanded Real GDP supplied (trillions of 2005 yen) 75 600 400 105 450 550 135 300 700 The short-run macroeconomic equilibrium real GDP is ¥------ trillion and the equilibrium price level is ------. The size of the (recessionary , or inflamatory) gap is ¥-------- trillion.
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Attached: figure 1: Hayek’s (Classical) AD-AS Model Question 1 Why does Hayek’s aggregate supply curve always lead to an equilibrium level of national output equal to the full-employment level of real GDP? Question 2 Hayek says that markets will heal themselves and that government should not intervene. How does the AD-AS model reflect Hayek’s idea that governments cannot increase real GDP beyond the level that the free market economy is able to produce? Question 3 Do you believe that the Hayek’s classical AD-AS model explain the factors that cause changes (shifts) in AS realistically? Why or why not?
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urgent Question 3 [Consider how the COVID-19 pandemic has caused major disruption in global supply chain affecting the supply of critical inputs to production. This has negatively affected the supply side of Singaporean economy on a large scale.] (a) [Illustrate the impact of this supply-side disruption on the Singaporean economy using the AD-AS model. Assume that the economy was initially in good shape and operating at its potential represented by Y*. Provide an explanation to explain what is happening in your diagram. (100 words)] (b) [Following this shock to the economy, as described in part (a) of this question, indicate what would be the response of the Central Bank for each of the scenarios below. Highlight any trade-offs that the Central Bank must consider for each of these potential responses (100 words total) Scenario (i) - Assume the Central Bank is most concerned about inflation. Scenario (ii) - Assume the Central Bank is most concerned about unemployment. Explain the…