Homework Answers
Answer:
7)
A) Increase in oil price increases cost of production because oil is an important input in the production of many good. This will decrease short run aggregate supply, shifting the SRAS curve leftward.
B) A tax credit for small businesses inspires firms to buy new company cars, increases investment (buying new cars is investment spending for those firms). This will increase AD (AD = Consumption + investment + government spending + net export), shifting the AD curve rightward.
C) A decrease in the price of the raw materials decreases cost of production, increases SRAS. This will shift the SRAS curve rightward.
D) An increase in imports and decrease in export decreases net export (net export = export - import). Therefore AD will decrease, shifting the AD curve leftward.
Note : As per the HOMEWORKLIB RULES i answered only first four sub-parts.so please re-post the rest .
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7. SRAS, LRAS, AD curves are used to analyze macroeconomic changes. Which of these three curves...
i only need answer for numer E to H. 7. SRAS, LRAS, AD curves are used to analyze macroeconomic changes. Which of...
i
only need answer for numer E to H.
7. SRAS, LRAS, AD curves are used to analyze macroeconomic changes. Which of these three curves or lines will shift and in which direction (right or left) under the following conditions? Oil is used as input in the production of many goods. Say, oil prices increase: a. A tax credit for small businesses inspires firms to buy new company cars: b. A decrease in the prices of raw materials that are...
only need answer numer E to H 7. SRAS, LRAS, AD curves are used to analyze...
only need answer numer E to H
7. SRAS, LRAS, AD curves are used to analyze macroeconomic changes. Which of these three curves or lines will shift and in which direction (right or left) under the following conditions? a. Oil is used as input in the production of many goods. Say, oil prices increase: b. A tax credit for small businesses inspires firms to buy new company cars: F. A decrease in the prices of raw materials that are used...
Using aggregate demand (AD), short-run aggregate supply (SRAS) and long-run aggregate supply (LRAS) curves
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.
6. Which set of changes is definitely predicted to lower Real GDP in the short run?...
6. Which set of changes is definitely predicted to lower Real GDP in the short run? a. The money supply falls and labor productivity rises. b. The U.S. dollar appreciates and wage rates fall. c. The U.S. dollar depreciates and the government passes a law making it easier for entrepreneurs to make a profit. d. Foreign real national income falls and the economy experiences an adverse supply shock. 7. Which set of changes will definitely shift the aggregate demand (AD)...
econ LRAS, SRAS, SRAS SRAS Pnce Level Real GDP per Year 12) Refer to the graph...
econ
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As prices rise, a fixed money supply will be able to buy fewer goods and services....
As prices rise, a fixed money supply will be able to buy fewer goods and services. This real balance effect is due to a(n) reduction in the interest rate. Increase in aggregate demand Decline in the purchasing power of the fixed quantity of money. Increase in income. The international substitution effect exists because a Higher price level will reduce interest rates and stimulate foreign investment. Lower price level will make domestically produced goods less expensive relative to foreign goods. Higher...
7. Suppose that Canada imposes an import quota on automobiles. In the open-economy macroeconomic model, which of...
7. Suppose that Canada imposes an import quota on automobiles. In the open-economy macroeconomic model, which of the following curves would this quota shift? a. supply of loanable funds left b. demand for loanable funds left c. demand for Canadian dollars right d. supply of Canadian dollars left 8. Suppose the Canadian government imposed import quotas on agricultural products. According to the foreign-currency exchange market diagram, which of the following outcomes would most likely result? a. Both the demand and supply curves...
From the list on your right select the letter that contains the word phrase, name, etc...
From the list on your right select the letter that contains the word phrase, name, etc that best matches the word phrase, name, etc listed on the left Real Balance (wealth) effect A massive cut in government expenditure Table of exchange rates between US Dollar and Chinese Yuan Renminbi for 2 consecutive years A The aggregate demand curve shifts to the right B. = (Nominal Wage Price)/100 Year $1 X 6.80 A decline in the overall price level improves the...
solve using attached graphs if neccesary (2) 140 points Use the standard short-run AD-AS model to...
solve using attached graphs if neccesary
(2) 140 points Use the standard short-run AD-AS model to answer this question. (Assume that all the taxes in this model are income taxes.) Economists do not agree on the cause of the 1991-92 recession in the U.S. The two most promising explanations are: (A) the "oil price shock" explanation, and (B) the "credit crunch" explanation. The oil price shock explanation says that when Iraq invaded Kuwait in the summer of 1990, this created...
9. Applying the extended AD-AS model Financial crises, such as the one that impacted many developed...
9. Applying the extended AD-AS model
Financial crises, such as the one that impacted many developed
countries starting in 2007, decrease banks’ ability and willingness
to make loans. Decreased availability of credit decreases
businesses’ ability to make investment purchases and consumers’
ability to buy goods and services. As a result, a financial crisis
is a negative shock for an economy.
The following graph shows an economy’s aggregate demand curve
and its short-run and long-run aggregate supply curves after a
financial...
i
only need answer for numer E to H.
7. SRAS, LRAS, AD curves are used to analyze macroeconomic changes. Which of these three curves or lines will shift and in which direction (right or left) under the following conditions? Oil is used as input in the production of many goods. Say, oil prices increase: a. A tax credit for small businesses inspires firms to buy new company cars: b. A decrease in the prices of raw materials that are...
only need answer numer E to H
7. SRAS, LRAS, AD curves are used to analyze macroeconomic changes. Which of these three curves or lines will shift and in which direction (right or left) under the following conditions? a. Oil is used as input in the production of many goods. Say, oil prices increase: b. A tax credit for small businesses inspires firms to buy new company cars: F. A decrease in the prices of raw materials that are used...
6. Which set of changes is definitely predicted to lower Real GDP in the short run? a. The money supply falls and labor productivity rises. b. The U.S. dollar appreciates and wage rates fall. c. The U.S. dollar depreciates and the government passes a law making it easier for entrepreneurs to make a profit. d. Foreign real national income falls and the economy experiences an adverse supply shock. 7. Which set of changes will definitely shift the aggregate demand (AD)...
econ
LRAS, SRAS, SRAS SRAS Pnce Level Real GDP per Year 12) Refer to the graph above. At point E3, the economy is experiencing A) recessionary gap B) stagflation C) inflationary gap D) full economy 13) From the point in question 12, what needs to be done using Aggregate Supply to get back to full employment? A) Decrease government spending B) Fed. to sell government bonds C) Produce more petroleum D) Decrease laborers 14) From the point in question 12,...
From the list on your right select the letter that contains the word phrase, name, etc that best matches the word phrase, name, etc listed on the left Real Balance (wealth) effect A massive cut in government expenditure Table of exchange rates between US Dollar and Chinese Yuan Renminbi for 2 consecutive years A The aggregate demand curve shifts to the right B. = (Nominal Wage Price)/100 Year $1 X 6.80 A decline in the overall price level improves the...
solve using attached graphs if neccesary
(2) 140 points Use the standard short-run AD-AS model to answer this question. (Assume that all the taxes in this model are income taxes.) Economists do not agree on the cause of the 1991-92 recession in the U.S. The two most promising explanations are: (A) the "oil price shock" explanation, and (B) the "credit crunch" explanation. The oil price shock explanation says that when Iraq invaded Kuwait in the summer of 1990, this created...
9. Applying the extended AD-AS model
Financial crises, such as the one that impacted many developed
countries starting in 2007, decrease banks’ ability and willingness
to make loans. Decreased availability of credit decreases
businesses’ ability to make investment purchases and consumers’
ability to buy goods and services. As a result, a financial crisis
is a negative shock for an economy.
The following graph shows an economy’s aggregate demand curve
and its short-run and long-run aggregate supply curves after a
financial...
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