Refer to the figure A above.Figure AFigure BPricePriceP3P2`D,P,D2Q,QuantityQ, Q2 Q,QuantityAssuming this market is representative of the economy as a whole, a negativedemand shock will:1) increase both the price level and the quantity of output produced.2) increase output, but leave prices unchanged.O 3) lower the price level, but leave output unchanged.4) raise the price level, but leave output unchanged.

Demand Curve: - demand curve is the graphical way of showing the relationship between the quantity…

Answered: Refer to the figure A above. Figure A…

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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ssume that the Australian economy originally starts at the long-run equilibrium. The shock in focus is the introduction of robots to undertake manual tasks and replace low-skilled workers. In 2019, Oxford Economics forecasted that approximately 20 million jobs around the world could be replaced by robots by 2030. This trend will exert sweeping and profound impacts on economies around the world, including Australia. Required: Considering the shock above, point out how Aggregate Demand, Short-run Aggregate Supply and Long-run Aggregate Supply will be affected Explain clearly in words the reasons behind the effects on Aggregate Demand, Short-run Aggregate Supply and Long-run Aggregate Supply, as pointed out in
"The oil price run - up of 2007 - 08 was caused by strong demand confronting stagnating world production. Although the causes were different, the consequences for the economy appear to have been very similar to those observed in earlier episodes, with significant effects om overall consumption spending and purchases of domestic automobiles in particular. The experience of 2007 - 08 should thus be added to this list of recessions to which oil prices appear to have made a material contribution". 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.
Suppose we have a market with upward sloping supply and downward sloping demand curves. After which of the following shocks can we guarantee that equilibrium price will increase? A shock which simultaneously shifts the supply curve downwards and the demand curve upwards. A shock which shifts the demand curve downwards. A shock which simultaneously shifts the supply curve downwards and the demand curve downwards. A shock which shifts the supply curve upwards. More than one of the above.
Macmillan Learning A positive demand shock will result from: a sudden increase in nominal wages. an increase in potential GDP. a move by the Bank of Canada to lower the interest rate. consumers and firms becoming more pessimistic.
Refer to the Figure B. Assuming this market is representative of the economy as a whole, a negative demand shock will most likely: 1) cause inflation. 2) increase unemployment. 3) lower prices, but leave output unaffected. 4) reduce both prices and output.
Consider the orginal IS-curve. Suppose demand in the U.S. for imports from Japan increases. This leads to what? Select all the correct statements. (a) Lower short - run output in the U.S.. (b) A downward shift in the IS - curve in Japan. (c) A positive aggregate demand shock in Japan. (d) An upward shift in the IS - curve in the U.S.. (e) A movement along the IS-curve in Japan.
Which of the following would properly be classified as an unfavorable supply shock? a)The interest rate decreases, spurring investment spending. b)The government introduces a set of market reforms that strengthens property rights and makes it easier and safer for buyers and sellers to write contracts. c)The world price of oil increases rapidly without warning and is expected to remain at the new high level for many years, making it more expensive for all firms to produce goods and services. d)There is a technological improvement that allows firms to reduce their costs of production permanently. e)There is an increase in government spending.
Please match each of the characteristics to the situation with which they are most associated. 1.Positive demand shock 2.Negative demand shock 3.Positive supply shock 4.Negative supply shock Answer Bank SRAS curve hits to the left Stagflation AD curve shifts to the left A positive shift that leads to a lower aggregate number SRAS curve shifts right AD curve shifts right A negative shift that leads to a lower aggregate price A negative shift that leads to a higher aggregate price A positive shaft that leads to a higher aggregate price
Consider if in a given economy, the parliament approves an increase in minimum wage. Starting from the medium run equilibrium, when economy is at full employment to discuss the effects of this shock. a)- Using a set of WS/PS curves, and only in labor market, in step by step way, explain the impacts. b)- Using the aggregate supply and demand (AS/AD), and IS/LM curves, show the short and medium run equilibrium points. [No explanation, only neat and well-marked graphs are acceptable]

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