1. Labour Market. Draw a diagram of the labour market where there above the equilibrium level....
Draw a diagram that illustrates equilibrium in the money market. Now suppose the Bank of canada increase the money supply. Illustrates graphically and explain verbally how the money market moves to a new equilibrium
The graphs illustrate an initial equilibrium for the economy. Suppose that the stock market broadly decreases. Use the graphs to show the new positions of aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS) in both the short run and the long run, as well as the short-run and long-run equilibriums resulting from this change. Then, indicate what happens to the price level and GDP in the short run and in the long run. Short-run graph Long-run...
Question 1: AD-SRAS-LRAS Model Using aggregate demand (AD), short-run aggregate supply (SRAS) and long-run aggregate supply (LRAS) curves, graphically illustrate the effect of an increase in the money supply on output and prices in the short and long run. Assume that the economy is initially in long run equilibrium at the potential output level and prices are fixed in the short-run. In your graph, label "A" for the initial equilibrium, "B' for the short-run equilibrium, and "C" for the long-run equilibrium.
Suppose that the economy is at long-run equilibrium. a. Draw a diagram to illustrate the state of the economy. Be sure to show aggregate demand, short-run aggregate supply, and long-run aggregate supply. b. Now suppose that a severe decline in the value of homes has affected the entire economy. Use your diagram to show what happens to output, employment, and the price level in the short run. Explain how households and businesses will adjust to this unanticipated shock to the...
1. Aggregate demand curve of an economy is given by AD = 51 - 0.2P, the long-run aggregate supply, LRAS, is 30 and the short-run aggregate supply is given by SRAS = 0.3 P (all output measures are in US$ billions and the price level is given as an index number). What could be the unemployment rate if the natural rate of unemployment is 4%? 2. Aggregate demand curve of an economy is given by AD = 51 - 0.2P,...
The graphs illustrate an initial equilibrium for the economy. Suppose that oil prices temporarily decrease Use the graphs to show the new positions of aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS) in both the short run and the long run, as well as the short-run and long-run equilibriums resulting from this change. Then, indicate what happens to the price level and GDP in the short run and in the long run. Short-run graph Long-run graph...
Question 2 The yearly barley is almost ready to be harvested in Ogdenville (still funny). The AD, SRAS and LRAS curves are given as: Y = 100/P+99 And the aggregate supply curves as: P = 2Y-100 Y* = 100 [2 points] Find the output and price level for Ogdenville in the short run. [4 points] If potential output is 100, is ogdenville facing a recession or exapansion? In addition, Illustrate the situation (LRAS, SRAS and AD curves with SR and...
Suppose that laws are passed banning labor unions and that resulting lower labor costs are passed along to consumers in the form of lower prices. (a) Identity the type of shock. Demand shock or supply shock? Favorable or adverse? Explain. (0.5 points) (b) Use the aggregate demand–aggregate supply model to illustrate graphically the impact in the short run and the long run of this shock. Be sure to label: i. the axes; ii. the curves (LRAS, SRAS and AD); iii....
@ Suppose that there is a sudden increase in the aggregate demand that moves the economy from its long-run equilibrium. A. What are the effects of this change in the short-run and the long-run? B. Illustrate this change using an appropriately labeled AD-SRAS-LRAS model. Please describe in detail.
Suppose the economy is initially in long-run equilibrium in the AD-AS model. Then stock prices decline sharply. Draw a diagram (show changes) of AD, LRAS, and SRAS for short run and long run with no government intervention.