The following graphs show the state of an economy that is currently in long-run equilibrium. The first graph shows the aggregate demand (AD) andlong-run aggregate supply (LRAS) curves. The second shows the long-run and short-run Phillips curves (LRPC and SRPC).?PRICE LEVELINFLATION RATE0032LRÅS6912OUTPUT (Trillions of dollars)LRPC64UNEMPLOYMENT RATE (Percent)81510ADSRPC18126 6ADLRASSRPCLRPC Which of the following statements are true based on these graphs? Check all that apply.The unemployment rate is currently 6% higher than the natural rate of unemployment.The natural level of output is $9 trillion.The current quantity of output is greater than potential output.Suppose the central bank of the economy increases the money supply.Show the long-run effects of this policy on both of the graphs by shifting the appropriate curves.The long-run effect of the central bank's policy isin real GDP.in the inflation rate,in the unemployment rate, and

Long Run Aggregate Supply function depicts the changes in output as a function of changes in prices…

The following graphs show the state of an economy that is currently in long-run equilibrium. The first graph shows the aggregate demand (AD) and long-run aggregate supply (LRAS) curves. The second shows the long-run and short-run Phillips curves (LRPC and SRPC). PRICE LEVEL INFLATION RATE 0 0 2 12 9 OUTPUT (Trillions of dollars) 4 LRÅS 0 LRPC 6 E 8 UNEMPLOYMENT RATE (Parrent) 15 10 AD SRPC 18 12 ģ AD LRAS SRPC 0 LRPC (3) ? ?

The following graphs show the state of an economy that is currently in long-run equilibrium. The first graph shows the aggregate demand (AD) and long-run aggregate supply (LRAS) curves. The second shows the long-run and short-run Phillips curves (LRPC and SRPC). PRICE LEVEL INFLATION RATE 0 0 2 12 9 OUTPUT (Trillions of dollars) 4 LRÅS 0 LRPC 6 E 8 UNEMPLOYMENT RATE (Parrent) 15 10 AD SRPC 18 12 ģ AD LRAS SRPC 0 LRPC (3) ? ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Brent, the international oil marker, hit US$130 a barrel on 8th March 2022. The oil price is close to 90 per cent above their level at the same point in time last year. Suppose that the rise in oil price is permanent. It creates an inflation shock and, at the same time, reduces potential output. With the aid of AD-AS model, show the difference in the effects of the oil price increase on output and the inflation rate in the long run if the government does not engage in stabilization policy and if the government does engage in stabilization policy to keep the inflation level low. Please elaborate your answer verbally.
Please answer both parts! macroeconomics; long-run. Thank you!
QUESTION 9 Refer to the graphs, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. Cost-push inflation is depicted by: Price Level AS, AS, Price Level Price Level AS2 AS, AS P, P2 P P, AD AD, Q, AD, AD AD, Q, Q, Real GDP 0 Q, 0 Q, Q2 Real GDP Real GDP (A) (B) (C) A. OB. OB and C. O A and B.
Measuring Inflation and Unemployment: Around the World The growth of American tourism to Cuba has dramatically affected private sector employment, as Cuban entrepreneurs start ventures focused on this new group of tourists. The influx of American tourists to Cuba is likely to lead to Ohyperinflation, as the Cuban economy begins to expand, and new businesses begin to flourish. disinflation, as employment flourishes in the informal market. inflation, as more money chases the limited volume of goods and services available in the Cuban economy. O deflation, as Cuban businesses compete for tourist dollars.
According to the St. Louis Federal Reserve the natural unemployment rate is 4.44 percent (Q2 2022 B) and the U.S. Bureau of Labor Statistics (BLS) estimates the U.S. unemployment rate (U3, March 2022 ) to be 3.6 percent. If you expect unemployment to continue to fall the short-run Phillips curve would predict: O A decrease in the inflation rate. An increase in the inflation rate. A decrease in the unemployment rate. An increase in the unemployment rate.
2. Analyze the effects of the following developments on both the short-run and the long-run Phillips curves. Use the graphs and explain in detail: a) a rise in the natural rate of unemployment b) a substantial increase in the price of energy
QUESTIONS Which of the following can create demand-pull inflation? O Excessive aggregate spending supply disruptions caused by global pandemics and regional wars O Sharply rising oil prices Higher labor costs Recessions and depressions
Step 1 Plot the graphs. The corresponding table includes a breakdown including Inflation Rate, Unemployment Rate, Price Level, and Real GDP. Using the data below, plot the graphs: Plot the short-run Phillips curve and the aggregate supply curve on separate graphs. Plot the long-run Phillips curve on a separate graph, when the natural unemployment rate is 6%. Inflation Rate Unemployment Rate Price Level Real GD 2% 7% 104 9.8 3% 6% 103 10.0 4% 5% 102 10.2
2. The Phillips curve in the short run and long run In the year 2023, aggregate demand and aggregate supply in the fictional country of Gurder are represented by the curves AD2023 and AS on the following graph. Suppose the natural rate of output in this economy is $6 trillion. NOTE: OPTIONS FOR BLANKS ARE: 1. The short-run Phillips curve is ______ (a vertical OR a downward sloping OR an upward sloping) 2. Because output at point C is _____ (less than OR greater than OR equal to) the natural rate of output, the unemployment rate associated with outcome C is _____ (less than OR greater than OR equal to) 3. This line is _____ (a vertical OR a downward sloping OR an upward sloping)
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Suppose that for years East Confetti's short-run Phillips Curve was such that each 1 percentage point increase in its unemployment rate was associated with a 4 percentage point decline in its inflation rate. Then, during several recent years, the short-run pattern changed such that its inflation rate rose by 3 percentage points for every 1 percentage point drop in its unemployment rate. Graphically, did East Confetti's Phillips Curve shift upward or did it shift downward? |(Click to select) V
32 There is a new central bank president who wants low inflation much more than the previous president did. According to the Augmented Phillips Curve Model, in this situation, which of the following would be the most help in keep unemployment from rising in the sort run? a.People know the central bank president's true desires and believe he will stay in office for a long time b.Peoples' wage wage contracts are long-lasting. c.People know the central bank president's true desires and believe that he will only be in office for a short time. d.People think that the central bank president's desires are the same as the previous president's and believe that the new president will be in office for a short time. e.People think that the central bank president's desires are the same as the previous president's and believe that the new president will be in office for a