MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
10th Edition
ISBN: 9781319467203
Author: Mankiw
Publisher: MAC HIGHER
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Chapter 1, Problem 5QQ
To determine
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Students have asked these similar questions
Select the correct statement/statements
which are correct as per the famous 'Say's
Law' using the code given below :
1. Economic systems are 'supply-led'.
2. All accruing income is to be spent.
3. Aggregate supply creates its own
aggregate demand in an economy.
CODE :
(a) 1 and 2
(b) 2 and 3
(c) 1 and 3
(d) 1, 2 and 3
For each of the following economic events, analyze the short-run and long-run transitions of the economy without and with
government intervention. For each question, start from the initial long run equilibrium, point A.
G
point D, point C
point E, point B
SRAS
Q10. There is a sudden decrease in oil price. Without government intervention, this would move the economy from point A to
in the long run
in the short run, then to
point G, point A
point G, point B
AD₂
Explain the concept of excess demand in macroeconomics. Also, explain the role of open market operation in correcting it.
(Kinly explain with diagram)
Chapter 1 Solutions
MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
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- 1. This assignment further explores how demand and supply shocks effect the equilibrium price in a market. Imagine that the market for acoustic guitars is described by the following demand and supply curves: Qa = A - P Qs = B + SP a. Find the equilibrium price and quantity in the market. b. Form the inverse supply and demand functions and, Interpret the terms A and -B/8. f. Where A > 0, B 0. C. Explain why the emergence of a market for guitars requires the following: A> -B/8 > 0. d. Interpret the parameter & and, provide examples of when it is low or high. e. Suppose that master guitarist Julian Lage gives a performance that goes viral on YouTube. His amazing virtuosity sparks a massive increase in the demand for guitars. How would this shock be captured by the parameter A. Draw the supply and demand curves before and after the shock and show how the equilibrium changes. Based on your graph what, if anything, can you say about how the equilibrium price and quantity change? Now let's…arrow_forwardpls helparrow_forward1. Explain what will happen to an Agregate demand-Agregate supply diagram, if there is a decrease in input prices. 2. Explain how the changes in wages can affect equilibrium.arrow_forward
- with explanation please Select the correct statement/statements which are correct as per the famous ‘Say’s Law’ using the code given below : 1. Economic systems are ‘supply−led’. 2. All accruing income is to be spent. 3. Aggregate supply creates its own aggregate demand in an economy. CODE : (a) 1 and 2 (b) 2 and 3 (c) 1 and 3 (d) 1, 2 and 3arrow_forwardThe demand and supply model determines Select one: A. demand prices. B. supply prices. C. absolute prices. D. relative prices. E. money prices.arrow_forwardMost short-term fluctuations in the business cycle are caused by options: a. economic demand shocks; inflexible pricing markets. b. an unexpected change in worker productivity. c. economic supply shocks; flexible pricing markets. d. economic supply shocks; inflexible pricing markets.arrow_forward
- pls helparrow_forwardChoose those are correct. Please provide answer in 1 hr please it's requestarrow_forwardQuèstion 1 1- one of the most famous Classical economists is 2-A dictum of economist J.B. Say is 3- one of the Assumptions of the classical model is 4- Money Illusion means john Maynard Keynes Reacting to changes in money prices rather than relative prices Pure competition does not exists. wages and prices were flexible Click Submit to com supply creates its own demand Adam Smith the competitive markets are not existed clasical theory 1 (1).pptx production posibi.ptx productionarrow_forward
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