Suppose that the economy is depicted in the graph to the right. 160 a. The current equilibrium price level and output level respectively are: 100 SRAS 150 and $ 9 trillion. (Enter your response as a whole number.) LRAS 140어 b. Using the line drawing tool, show a change in aggregate demand that leads to an inflationary gap. Use the line drawing tool and label this new line "AD,. 130- 120- Carefully follow the instructions above, and only draw the required objects. 110 100아 90- 80- 7어 AD 60- so- 40- 10 12 14 16 18 20 Real GDP (S trillions)

Suppose that the economy is depicted in the graph to the right. 160 a. The current equilibrium price level and output level respectively are: 100 SRAS 150 and $ 9 trillion. (Enter your response as a whole number.) LRAS 140어 b. Using the line drawing tool, show a change in aggregate demand that leads to an inflationary gap. Use the line drawing tool and label this new line "AD,. 130- 120- Carefully follow the instructions above, and only draw the required objects. 110 100아 90- 80- 7어 AD 60- so- 40- 10 12 14 16 18 20 Real GDP (S trillions)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the Keynesian sticky wage model. Assume that the economy is operating close to, but not at, its zero lower bound (ZLB). Discuss the following: 1. Could a negative shock to the IS curve make the ZLB bind? Explain and illustrate graph- ically. 2. Could a shock to current productivity z make the ZLB bind? What would need to be the sign of this shock to make the ZLB bind? 3. In the data, in most episodes where the ZLB binds (the US in the wake of the Great Recession, Japan during the 1990s, and the US during the Great Depression), output is low. Given this, would a supply shock as the reason for a binding ZLB make empirical sense? 4. Intuitively, explain why changes in government spending have a bigger effect on output at the ZLB than away from it.
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Question The Bank of Canada introduces an unexpected increase in the money supply. Answer the following: (a) Use the IS-LM model to determine how the policy ffects national income, Y, and real interest rates, r, in the short run. (b) Based on your answer from part (a), how do consumption, C, and investmentL change? Explain. (c) Now use the AD-AS model to illustrate how the policy affects national income in the short run. (d) How does the magnitude of the change in national income in part (c) compare with the magnitude of the change in part (a)? If they differ, what accounts for the difference? Explain. (e) Use the AD-AS model to briefly explain how the economy adjusts to a new long- run equilibrium. wer here. Please write out your answer and scan and upload it at the end of th
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please correct the statement if it false, or if it is true justify why its true. Thank you.....
of The economy of Langoria is currently in a state of long-run equilibrium in which the economy is producing at its Natural Real GDP. The level of Real GDP is currently 3 trillion dollars, and the price level is 130. 100 PRICE LEVEL 170 160 150 140 130 120 110 100 2 Changes in a Self-Regulating Economy AD AD₂ BRAS 1 2 3 LRAS 23
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this is true or false: an increase in AS will result in more jobs for the economy as long as we are not at full employment output i understand an increase in AS will result in more jobs for the economy, but i dont understand the last part of the question. "as long as we are not at full employment output". doesnt the AS curve become vertical at Qfe? can you explain this for me? idk whether this is true or false.
Homework: Chapter 09 PRICE LEVEL 140 135 130 125 120 115 110 105 100 0 Changes in a Self-Regulating Economy 1 AD2 SRAS AD₁ LRAS 6 2 3 4 5 REAL GDP (Trillions of dollars) 8 Suppose there is a sudden decrease in government purchases that causes a shift in aggregate demand from AD; to AD₂. As a classical economist from Langoria, you explain that the shift in aggregate demand creates . You also explain that will be affected in the short run. You note that such a gap leads to an unemployment rate that is to ▼ As wages change, the explain that in the long run, the natural unemployment rate. This means that wages are certain until Real GDP equals Natural Real GDP. Finally, you curve shifts to the will be affected. MacBook Pro X A-Z A+
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