Homework Answers
a) Higher interest rate would decline private investment so investment spending declines. This decreases aggregate demand and shift AD to the left to reach D1
b) The new short run price level has reduced and real GDP has also reduced because AD has shifted to the left
c) In the short run it is cheaper to produce below the full employment because price level has reduced
d) Hence cost of producing below the full employment level of real GDP is decreased.
Add Answer to:
This Question: 1pl LRAS ou The macroeconomy is depicted by the graph to the right a....
This Question: 1 pt 11 of 30 This In the graph on the right the economy...
This Question: 1 pt 11 of 30 This In the graph on the right the economy is in long-run equilibrium at point A Now, assume that there is an unexpected increase in the price of oil. 1) Use the line drawing tool to show the resulting short-run equilibrium on your diagram. Label any new aggregate demand or aggregate supply curve as AD, SRAS, LRAS, p riate 2.) Use the point drawing tool to locate the new short run equilibrium point...
The assignment is about drawing the graph of AD, SRAS and LRAS and writing down what...
The assignment is about drawing the graph of AD, SRAS and LRAS and writing down what would happen under the condition "decrease in personal income taxes" Need to write down everything that happens by following the seven steps: 1) What would happen under the condition? (Whether AD, SRAS, or LRAS would change? And in which direction the curve would shift?) 2) Where is the new short-run equilibrium? (You need to mark the point in the graph.) 3) What changed in...
Concept Question 1.4 Question Help Suppose that an economy begins in equilibrium at E, as depicted...
Concept Question 1.4 Question Help Suppose that an economy begins in equilibrium at E, as depicted in the graph to the right Assume that the economy follows the Classical Model assumptions LRAS a. Using the line drawing lool, draw a new aggregate demand (AD) curve reflecting an increase in the amount of money in circulation Properly label this line Carefully follow the instructions above, and only draw the required objects Price level Real GOP 5 trilions) Click the graph, choose...
Assume the U.S. economy is in both short-run and long-run equilibrium, as shown in the graph...
Assume the U.S. economy is in both short-run and long-run equilibrium, as shown in the graph below. Suppose the federal government increases the amount of spending on the military. either the new a. Show the effect on the short-run equilibrium as a result of increased government spending. Using the graph, dra AD curve or new AS curve resulting from this change in spending. Instructions: Use the tool provided 'New Curve' to plot the appropriate line. After placing the curve, click...
LRAS In the graph to the right illustrating the AD-AS model, assume the economy was in...
LRAS In the graph to the right illustrating the AD-AS model, assume the economy was in equilibrium at point E1. Then, assume there was a decline in spending on new houses. Where does short-run equilibrium occur? Where does long-run equilibrium occur? 1.) Using the point drawing tool, plot the point that represents short-run equilibrium. Label this point E2. Price level, P. SRAS a SRAS2E1 2.) Using the point drawing tool, plot the point that represents long-run equilibrium. Label this point...
New LRAS, SRAS, and AD lines in the graph for the next year: Price level The...
New LRAS, SRAS, and AD lines in the graph for the next
year:
Price level The following graph shows an economy in long-run macroeconomic equilibrium. All the usual assumptions of the dynamic demand and supply model hold Firms and workers expect there to be a decline in the inflation rate in the coming year LRAS, SRAS Use the line tool to draw three lines 1) the new LRAS, 2) the new SRAS, and 3) the new AD line in the...
The short-run aggregate supply curve is shown at right. Suppose OPEC decides to reduce oil production....
The short-run aggregate supply curve is shown at right. Suppose OPEC decides to reduce oil production. Using the line drawing tool, draw and label a new short-run aggregate supply. Carefully follow the instructions above, and only follow the required object. The impact would result in Price Level AD O A. inflation: a lower price level and lower unemployment. O B. recession: a lower price level and higher unemployment. O C. stagflation: a higher price level and higher unemployment. OD. depression:...
The graph below depicts an economy where an increase in aggregate demand has caused inflation. The...
The graph below depicts an economy where an increase in aggregate demand has caused inflation. The economy's current level of real GDP (Y) is above its long-run equilibrium. This is illustrated by the long-run aggregate supply curve (LRAS) and a price level 2) above the equilibrium value of Pe Fiscal Policy Price Level Real GDP Which of the following is an example of an automatic stabilizer that would help this economy move toward full employment again A reduced need for...
The economy of Southland is currently in a macroeconomic equilibrium depicted by point on the graph...
The economy of Southland is currently in a macroeconomic equilibrium depicted by point on the graph to the Suppose that the level of investment expenditures increases by 5500 and the multiplier is 2. The multiplier is ent from the simple multiplier, which assumes a horizontal AS curve d 1. Use the three-point curve drawing tool to draw and label a new AD curve that shows this AD shock Use the multipler ol 2 10 calculate the exact location of the...
supply curve to shift leftward to SRAS, as shown in the graph at right. The economy is currently in short-run equilibrium at point E, and the reduction in supply is expected to be permanent. LRAS...
supply curve to shift leftward to SRAS, as shown in the graph at right. The economy is currently in short-run equilibrium at point E, and the reduction in supply is expected to be permanent. LRAS SRAS SRAS 1.) Using the line drawing and/or 3-point curved line drawing tool, show the adjustment to long-run equilibrium in this situation. Properly label your new curve(s). 2.) Using the point drawing tool, identify the new long-run equilibrium point and label the point 'E2 Carefully...
This Question: 1 pt 11 of 30 This In the graph on the right the economy is in long-run equilibrium at point A Now, assume that there is an unexpected increase in the price of oil. 1) Use the line drawing tool to show the resulting short-run equilibrium on your diagram. Label any new aggregate demand or aggregate supply curve as AD, SRAS, LRAS, p riate 2.) Use the point drawing tool to locate the new short run equilibrium point...
Concept Question 1.4 Question Help Suppose that an economy begins in equilibrium at E, as depicted in the graph to the right Assume that the economy follows the Classical Model assumptions LRAS a. Using the line drawing lool, draw a new aggregate demand (AD) curve reflecting an increase in the amount of money in circulation Properly label this line Carefully follow the instructions above, and only draw the required objects Price level Real GOP 5 trilions) Click the graph, choose...
Assume the U.S. economy is in both short-run and long-run equilibrium, as shown in the graph below. Suppose the federal government increases the amount of spending on the military. either the new a. Show the effect on the short-run equilibrium as a result of increased government spending. Using the graph, dra AD curve or new AS curve resulting from this change in spending. Instructions: Use the tool provided 'New Curve' to plot the appropriate line. After placing the curve, click...
LRAS In the graph to the right illustrating the AD-AS model, assume the economy was in equilibrium at point E1. Then, assume there was a decline in spending on new houses. Where does short-run equilibrium occur? Where does long-run equilibrium occur? 1.) Using the point drawing tool, plot the point that represents short-run equilibrium. Label this point E2. Price level, P. SRAS a SRAS2E1 2.) Using the point drawing tool, plot the point that represents long-run equilibrium. Label this point...
New LRAS, SRAS, and AD lines in the graph for the next
year:
Price level The following graph shows an economy in long-run macroeconomic equilibrium. All the usual assumptions of the dynamic demand and supply model hold Firms and workers expect there to be a decline in the inflation rate in the coming year LRAS, SRAS Use the line tool to draw three lines 1) the new LRAS, 2) the new SRAS, and 3) the new AD line in the...
The short-run aggregate supply curve is shown at right. Suppose OPEC decides to reduce oil production. Using the line drawing tool, draw and label a new short-run aggregate supply. Carefully follow the instructions above, and only follow the required object. The impact would result in Price Level AD O A. inflation: a lower price level and lower unemployment. O B. recession: a lower price level and higher unemployment. O C. stagflation: a higher price level and higher unemployment. OD. depression:...
The graph below depicts an economy where an increase in aggregate demand has caused inflation. The economy's current level of real GDP (Y) is above its long-run equilibrium. This is illustrated by the long-run aggregate supply curve (LRAS) and a price level 2) above the equilibrium value of Pe Fiscal Policy Price Level Real GDP Which of the following is an example of an automatic stabilizer that would help this economy move toward full employment again A reduced need for...
The economy of Southland is currently in a macroeconomic equilibrium depicted by point on the graph to the Suppose that the level of investment expenditures increases by 5500 and the multiplier is 2. The multiplier is ent from the simple multiplier, which assumes a horizontal AS curve d 1. Use the three-point curve drawing tool to draw and label a new AD curve that shows this AD shock Use the multipler ol 2 10 calculate the exact location of the...
supply curve to shift leftward to SRAS, as shown in the graph at right. The economy is currently in short-run equilibrium at point E, and the reduction in supply is expected to be permanent. LRAS SRAS SRAS 1.) Using the line drawing and/or 3-point curved line drawing tool, show the adjustment to long-run equilibrium in this situation. Properly label your new curve(s). 2.) Using the point drawing tool, identify the new long-run equilibrium point and label the point 'E2 Carefully...
Most questions answered within 3 hours.
-
1. Sketch the expected Mass Spectrum of Pentane (C5H12)
2. Draw the most stable Newman projection...
asked 12 seconds ago -
There are changes in the dynamics of a relationship of a family
when family takes on...
asked 2 minutes ago -
Prove that the following is a valid cumulative distribution
function
F(x) = x/(1+x) for a>=0
0...
asked 2 minutes ago -
Caculate the PH THANK YOU!
[OH−] = 1.9×10−7 M
[OH−] = 1.6×10−8 M
[OH−] = 7.2×10−11...
asked 13 minutes ago -
Suppose you drive an old truck with a 32 gallon gas tank that
gets 16 miles/gallon....
asked 15 minutes ago -
What can be the anticipated results of curing diabetes with stem
cells?
asked 11 minutes ago -
As
an analyst you believe that Acme Company will pay a dividend of $3
per share...
asked 20 minutes ago -
Claim: At most 81% of adults do not have hypertension. When 869
randomly selected adults were...
asked 36 minutes ago -
Assume a class has 19 members.
a. In how many ways can a president, a vice...
asked 34 minutes ago -
What could be a possible reason that protozoan infections are
increasing in the United States
asked 33 minutes ago -
Implement a Full Adder with two 4x1 Mux and the MSB as possible
inputs of the...
asked 42 minutes ago -
offering the survey (maybe via smart phones) is a good idea?
why?
asked 39 minutes ago