Use the graph below to answer the following question. If the economy is currently in equilibrium at E and the central bankand will causegap.sells Treasury bills, the curve will shift to theAggregatepricelevel, PLRASSRASP2E2P1E1AD 2AD 1Real GDPY YE= potentialoutput%3DAD:: left ; a recessionaryAD : left ; a recessionaryAD;; right; an inflationaryO AD, : right ; no

Aggregate demand is the total value of goods and services produced in the economy in given period of…

Use the graph below to answer the following question. If the economy is currently in equilibrium at E, and the central bank sells Treasury bills, the and will cause gap. curve will shift to the LRAS Aggregate price level, P SRAS P2 E2 P1 E1 AD 2 AD1 Real GDP Y1 YE= potential output O AD: left; a recessionary AD : left; a recessionary AD;; right ; an inflationary O AD, : right ; no

Use the graph below to answer the following question. If the economy is currently in equilibrium at E, and the central bank sells Treasury bills, the and will cause gap. curve will shift to the LRAS Aggregate price level, P SRAS P2 E2 P1 E1 AD 2 AD1 Real GDP Y1 YE= potential output O AD: left; a recessionary AD : left; a recessionary AD;; right ; an inflationary O AD, : right ; no

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. AD; SRAS; LRAS; Short-run equilibrium; Long-run equilibrium; Recessionary gap and Inflationary gap. Consider diagram below to answer the following questions: LRAS SRAS `AD1 Q1 Real GDP (a) – Use Point 1 and Point 2 to explain the difference between the short-run equilibrium and the long-run equilibrium. (b) - The economy is currently producing Qi. At this level of Real GDP, the economy is in a(n)_ . (recessionary gap or inflationary gap). Select one. (c) - The unemployment rate is lower at than - (Q:/QN, QN/ Q1). Select one. (d) – At QN, cyclical unemployment (Uc) is (positive, negative, zero). Select one. Price Level
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Fill in the Blanks Price Level LRAS SRAS (P) PE ☑ AD Type your answers in all of the blanks and submit Xz x² 2- QN QE Real GDP (Q) The economy depicted in the graph is experiencing a(n) inflationary You are correct regulating, aggregate demand ☑ will decrease to close the gap. You are incorrect gap. If this economy is self-
Draw diagram of a typical IS-LMmodel and indicate the changes in all the variables on the diagram should there be an increase in aggregate expenditure causing a shift of the IS curve to the right ( indicate the shift in the IS curve on your diagram) Indicate where macroequilibrium will be and properly label the axes on the diagram. Briefly explain what you understand such an IS-LM model is actually reflecting in terms of macroeconomics
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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please state which one the answer is Many thanks - question is attached
Figure 34-3 PRICE LEVEL a a a LRAS Y, Y₂ QUANTITY OF OUTPUT SRAS. SRAS. AD Refer to Figure 34-3. Starting from point B and assuming that aggregate demand is held constant, in the long run the economy is likely to experience a falling price level and a falling level of output, as the economy moves to point C. falling price level and a rising level of output, as the economy moves to point A. rising price level and a falling level of output, as the economy moves to point A. Orising price level and a rising level of output, as the economy moves to point C.
Using the graph, illustrate the long-run impact of the increase in government spending by shifting both the aggregate demand (AD) curve and the short-run aggregate supply (AS) curve in the appropriate directions PRICE LEVEL 240 200 2 200 400 600 800 OUTPUT (Bions of dollars) AS 1000 1200 þ 2þ 2 In the long run, due to the increase in government spending, the price level natural level of output, and the unemployment rate ? the natural rate. the quantity of gotput
How would I do e and f?
2. The graph below shows the AD-AS model in short-run equilibrium at price level Po and level of real GDP at Yo. Label the following: AD, SRAS, LRAS, Po and Yo. P Y A. Is this SR equilibrium a recessionary gap or an inflationary gap? Why is the undesirable? B. Assume Congress and the President decide to act. How would you suggest they alter each of the following (1,↓↓, or no change)? - Taxes - Transfer Payments -Government Spending C. Show the effects of these changes in the space above. Assume this intervention brings the economy back to potential GDP. D. As the economy moves from Yo to Yp, what happens to the following (1,↓, or no change)? - Real GDP - the unemployment rate - The price level - the rate of inflation
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