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Concept introduction:
Aggregate demand curve ( AD ): It shows how the
Short-run aggregate supply ( SRAS ): It is a positively =-sloped curve in which supply increases when the price rises. The reason for the upward sloping is that the wages are sticky in the short-run due to formal or informal contracts. At higher aggregate prices, there is higher profit leading to high level of output.
Long-run aggregate supply ( LRAS ): It is a vertical curve which means it is independent of price. When price increases there is no change in the quantity supplied. In the long-run, the nominal wages are not fixed, rather it can be negotiated.
Consumer confidence index (CCI): It is an index which indicates the confidence of consumers to spend in the upcoming future. It is measured to know the economy status in the near future.
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- Not use ai please letarrow_forwardConsider the market for sweaters in a Hamilton neighbourhood shown in the figure to the right. The consumer surplus generated by consuming the 29th sweater is OA. $67.90. OB. $58.20. ○ C. $77.60. OD. $38.80. ○ E. $19.50. Price ($) 97 68.0 48.5 29.0 29.0 Sweater Market 48.5 Quantity (Sweaters per week)arrow_forwardNot use ai pleasearrow_forward
- In the following table, complete the third column by determining the quantity sold in each country at a price of $18 per toy train. Next, complete the fourth column by calculating the total profit and the profit from each country under a single price. Price Single Price Quantity Sold Price Discrimination Country (Dollars per toy train) (Millions of toy trains) Profit (Millions of dollars) Price (Dollars per toy train) Quantity Sold (Millions of toy trains) Profit (Millions of dollars) France 18 Russia 18 Total N/A N/A N/A N/A Suppose that as a profit-maximizing firm, Le Jouet decides to price discriminate by charging a different price in each market, while its marginal cost of production remains $8 per toy. Complete the last three columns in the previous table by determining the profit-maximizing price, the quantity sold at that price, the profit in each country, and total profit if Le Jouet price discriminates. Le Jouet charges a lower price in the market with a relatively elastic…arrow_forwardNot use ai pleasearrow_forwardNot dhdjdjdjduudnxnxjfjfi feverarrow_forward
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- Location should be in GWAGWALADA Abuja Nigeria Use the Internet to do itarrow_forwardUsing data from 1988 for houses sold in Andover, Massachusetts, from Kiel and McClain (1995), the following equation relates housing price (price) to the distance from a recently built garbage incinerator (dist): = log(price) 9.40 + 0.312 log(dist) n = 135, R2 = 0.162. Interpretation of the slope coefficient? ► How would our interpretation of the slope coefficient change if distance were measured in metres instead of kilometres?arrow_forwardIf GDP goes up by 1% and the investment component of GDPgoes up by more than 1%, how is the investment share ofGDP changing in absolute terms?▶ In economics, what else is expressed as relative percentagechanges?arrow_forward
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