Use the IS-LM model to illustrate graphically the impact on output and interest rates of a one-time increase in the price level due to a large increase in oil prices.
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Use the IS-LM model to illustrate graphically the impact on output and interest rates of a
one-time increase in the
Be sure to label:
i. the axes;
ii. the
iii. the initial equilibrium values;
iv. the direction the curves shift; and
v. the terminal equilibrium values.
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- Economics protect the unit sales for tide 64 based on the log Lennar demand model and the following chart.just iAccording to the "4-Quadrant Model" (4QM), which of the following statement is correct? O If there is a positive demand shock in the space market, the housing rent is going to increase in the short run, and will be lower than the current rent in the long run. If there is a positive demand shock in the space market, the housing price is going to decrease in the short run, and increase in the long run. If there is a positive demand shock in the asset market, the housing rent is going to decrease in the long run. O If there is a positive demand shock in the asset market, the housing price is going to decrease in the short run, and will be lower than the current price in the long run.
- Suppose the US economy enters a recession. During the recession, inflation falls and interest rates rise. What kind of change ("shock") to demand and or production is likely cause of the recession? Answer in one short paragraph. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.1. a) Construct the AD-AS model showing AD, short run AS and long run AS intersecting at the potential output level and label this intersection Eo. Assume that this represents the Philippine economy before the pandemic. b) From the initial condition, illustrate in your graph how the pandemic affected the economy in the short run (was there a demand shock or supply shock or both)? c) Explain the reason for the shift in the curve or curves? d) Explain how the changes in the AD-AS model above have affected equilibrium real GDP, unemployment, and price level.question 3Consider the AS-AD and three-equations models of a closed economy discussed in the course.(a). Write down the expressions for the AS and AD curves and interpret the expressions: what is the intuition behind the two curves? What must be true of the model parameters and variables in the long-run equilibrium, i.e. in the steady state?(b). Analyse the effects of an oil supply shock that causes a temporary increase in inflation, using the three-equation model. Assume that the shock lasts for one-period and then assumes the value 2%. Describe the mechanisms that bring the economy back to long-run equilibrium. What happens to aggregate demand?(c). Consider an economy that starts out in steady state when the central bank decides to make the inflation target more ambitious. Analyse the effects of a decrease in the inflation target from ? to ??. Explain the mechanisms behind the adjustment to the new steady state.
- just ii please !!The uncertainty surrounding the COVID-19 pandemic led firms to reduce their desired investment in 2020. What are the short-run and long run effects on the equilibrium price and output levels? Please explain in words.Consider the following IS-LM model: C=100+0.4Yd 1=150+0.2Y-1000i T=100 G=200 j=.1 Calculate equilibrium output.
- "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.8. Assume that there is an exogenous decline in the price of imported oil. Using the graphical analysis in this chapter, explain how such a shock would affect output and the price level. Explain the role inflationary expectations play in this adjustment.2. Consider the IS-LM model derived in class. Suppose the economy of Economica is initially at the general equilibrium. This year, Economica's economy is hit by a negative oil price shock, i.e., oil prices in Economica increase dramatically. a. Explain and show graphically how an oil price shock affects the labor, goods, or the asset market b. Explain and show graphically how an oil price shock affects the short-run equilibrium in the IS-LM model c. Explain and show graphically how an oil price shock affects the general (long-run) equilibrium in the IS-LM model