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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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.
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The macroeconomy is depicted by the graph to the right 160- a. The current equilibrium price level and output level respectively are: and $ trillion. LRAS (Enter your responses as a whole numbers.) 140- SRAS 120- 100- 80- 60- AD 40- I 10' 12 14 16 18 20 Real GDP ($ trillions) Price level
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