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- Give proper explanation and solve all parts will definitely upvote. Hand written solution is not allowed.2. Assume the short-run aggregate supply curve can be expressed algebraically as: Y = 4,500 + 3,000π and the dynamic aggregate demand curve can be written as: Y = 5,000 – 1,000π a. Find the numerical value for the short-run inflation rate? Show your work. b. Find the numerical value for equilibrium output in the short run? Show your work.A C Inflation rate, Inflation Inflation T 4.5 4 Chart D 3.5 3 2.5 2 1 2 Select one or more: O Chart A Chart B Chart C 3 4 5 6 VPC 7 8 PC = π¹ 9 MR Output, Y B Inflation Inflation 11 10 Time period Figure 14 Policy response to a positive demand shock 13 15 17 12 14 16 18 19 4.5 20 4 3.5 3 2.5 2 2 3 19 4 5 7 9 11 13 15 17 8 10 12 14 16 18 20 Time period 6 D Inflation VPC 76 rate, Figure 14 shows four charts labelled A to D depicting aspects of a positive permanent demand shock. Charts B and C are from the DD209 macrosimulator, while Charts A and D show MR curves. Which two of these charts are consistent with the policy response from a central bank that has a strong inflation aversion? (Choose two answers.) MR PC = n¹ Output, Y
- Why does this mean? "the natural rate of unemployment" and also can elaborate more on why the longrun philips curve is vertical at the rate? why inflation is also constant in longrun equillibrium?ASAPWhich of the following situations would lead to actual inflation of 3%? A. future inflation is 1%; output-gap inflation is 0%; supply-shock inflation is 2% B. future inflation is 3%; output-gap inflation is 3%; supply-shock inflation is 3% C. future inflation is 1.5%; output-gap inflation is 1.5%; supply-shock inflation is 3% D. future inflation is 0%; output-gap inflation is 3%; supply-shock inflation is - 3% E. future inflation is 3%; output-gap inflation is 0%; supply-shock inflation is - 3%
- Consider an increase in government spending. Assume that the economy is initially operating at the natural level of output. In the short run, the impact on the IS-LM framework is This change results in In the medium run, the no output gap a negative output gap The resulting medium- a positive output gap his change is OYrn and current period's inflation is less than target inflation OY > Yn, r = rn and current period's inflation is greater than target inflation OY = Yn, r = rn and current period's inflation equals target inflation OY> Yn, rSolve this problem I upvoteGuy Ferrell, a student who lives in the country Paragon, observes that analysts are cutting their growth forecasts for the economy for the coming year. Most of them based their analysis on the fact that the level of inflation in the economy would adversely affect economic growth. However, Guy looks up the weekly inflation data for the past couple of months and finds that inflation has been stable and low. Which of the following, if true, would explain the analysts' predictions? A. The Producer Price Index has been steadily increasing over the past few months. B. A recent revision of the previous year's CPI data showed that it was overstated by one percentage point. C. The Purchasing Manager's Index, published by a supply-chain management firm in Paragon has been stable for the past couple of months. D. The government recently increased its growth projections for the year by 100 basis points. E.Most of Paragon's trade partners have reported…300 OA: B OB;B O C;D (1) OB:C D LM, LM₂ IS₂ IS₁ Y P3 P2 PL P Y3 Y2 (2) с AD₁ YI Y2 Y3 Refer to the figure above. If the economy is initially at point A in both panels, and the rate of inflation slows down, then the economy will be at point in panel 1 and point in panel 2. YI AD, AD₂ YInflation and international tradeIdentify which statements are true and which ones are false. For all statements, briefly explain why they are true or false. a) Economists projected inflation rate to be 4% in 2022 in country X. In reality, inflation rate was 7%. Borrowers in country X are better off.b) The government in country X decided to print more money and give transfers of $1,000 to citizens who recently retired. It will cause a decrease in money supply, so the value of money will increase, and prices will decrease.c) Countries X and Y are neighbors. When the government in country X decides to print more money, the value of currency of country Y increases, so this currency appreciates, while the currency of country X depreciates.d) Budget surplus in country X causes a shift of the supply curve for loanable funds to the left, so the real interest rate increases. Then, the net capital outflow decreases, and hence the real exchange rate decreasesHigh inflation rates are considered detrimental to a country's economy. Please describe and discuss the 2 major reasons that may induce a particular product seller to raise its product price. Please discuss and describe how high inflation levels may affect negatively participants in the 2 major groups of economic decision-makers.SEE MORE QUESTIONS