If fiscal policy is used to keep unemployment below the natural rate of unemployment, what will...
If fiscal policy is used to keep unemployment below the natural rate of unemployment, what will happen to prices and output? Prices will increase. decrease. Output will increase. decrease. Use the graph to demonstrate your answers by shifting the appropriate curve or curves. SRAS AND AD.
Homework Answers
If fiscal policy is used to keep the unemployment level below the potential level then the aggrgate demand curve will shift to the left and the new equilibrium will be at a lower price and lower output, i.e. output decrease and price will decrease.
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If fiscal policy is used to keep unemployment below the natural
rate of unemployment, what will...
In the economy depicted in the graph, what happens if there is no intervention from policy...
In the economy depicted in the graph, what happens if there is no intervention from policy makers? Use the graph, where LRAS represents long-run aggregate supply, SRAS represents short-run aggregate supply, and AD represents aggregate demand, to demonstrate the answers by shifting the appropriate curve or curves. LRAS SRAS Prices will Aggregate price level (P) decrease. O increase. Output will decrease. Real output (Q) O increase.
7. Effects of an active or passive policy
7. Effects of an active or passive policy The following graph shows the aggregate demand curve (AD), the short-run aggregate supply curve SRAS), and the long-run aggregate supply curve (LRAS) for a hypothetical economy. Suppose the economy is in short-run equilibrium. The _______ of $4 trillion drives unemployment _______ the unemployment rate consistent with full-employment output. Suppose public officials are concerned about the $4 trillion gap in the economy and the resulting lower-than-expected aggregate demand. The government has decided to follow an active...
Module 7 Ch.17 Fiscal Policy and AD-AS Graph (4 points on each scenario) This problem is...
Module 7 Ch.17 Fiscal Policy and AD-AS Graph (4 points on each scenario) This problem is adapted and modified from Openstax Ch.17 problem 53. Review ch.11 to 13 about AS-AD, Keynesian, and Neoclassical approaches. 1. Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in response to each of the situations below, and explain why. (2 points) 2. Sketch an AD-AS diagram for each of the situations. Your graph should include the vertical potential GDP, and...
A supply shock is A. an increase in the rate of inflation as a result of...
A supply shock is A. an increase in the rate of inflation as a result of expansionary fiscal policy, resulting in a leftward shift of the SRAS curve. B. a sudden increase in the price of an important natural resource, resulting in a leftward shift of the SRAS curve. O C. an increase potential GDP caused by a govemment expenditure multiplier, resulting in a leftward shift of the AD curve. D. an increase in both the inflation and the unemployment...
Detailed explanations please! I am confused Other things the same, an increase in the expected price...
Detailed explanations please! I am confused
Other things the same, an increase in the expected price level shifts a short-run aggregate supply right b. short-run aggregate supply left c. aggregate-demand right. d. aggregated-demand left Figure 35-1. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregato-demand (AD) curves. On the right-hand diagram, U represents the unemployment rate Phallips Curve SRAS 30 \B 130 15 115 High AD :Low AD 0% 10% 2 Refer to Figure 35-1. The curve...
Consider an economy with an inflationary gap. The advantage of using a contractionary fiscal policy rather...
Consider an economy with an inflationary gap. The advantage of using a contractionary fiscal policy rather than allowing the economy's natural adjustment mechanism to operate is that O A private sector expenditures increase on their own, the policy will stabilize real GDP. OB. It will shorten what might otherwise be a long recession OC. will reduce the inflationary pressure on prices that would otherwise ocur. OD. It wil dose the output gap. Click to select your answer MacBook Air Assume...
Suppose that the Mexican economy is described in the following graph: Economy is currently at point...
Suppose that the Mexican economy is described in the following
graph:
Economy is currently at point A; develop an appropriate fiscal
policy to restore the natural rate of output. Outline the effect of
government’s policy on AD and AS curve.
LRAS SRAS AD
6. The long-run effects of monetary policy Aa Aa The following graphs show an economy that is cur...
6. The long-run effects of monetary policy The following graphs show an economy that is currently in long-run equilibrium. The first graph shows the aggregate demand (AD) and long-run aggregate supply (LRAS) curves. The second shows the long-run (LR) and short-run (SR) Phillips curves. The point on each graph shows the economy's current position. According to the graphs, potential output in this economy is _______ and the natural rate of unemployment is _______ .Suppose the central bank of the economy decreases the...
9. For the 2 Graphs below des Unemployment--either the why it shitnt.-either the AD or the...
9. For the 2 Graphs below des Unemployment--either the why it shitnt.-either the AD or the SRAS curve will shift-tell mewchp A. Graphs below describe in each situation what happens to P (Prices), YOU MUST SHOW THE SHIFT ON THE GRAPH. (20 points) ls shifts and shifts SRAS P1 AD 01 RGDP d the Republicans agree to increase Government spending by The President (Trump) an trillion to pay for infrastructure and National Defense What happens to: a. Prices-- b. RGDP...
4. Suppose that the Mexican economy is described in the following graph: a. Economy is currently...
4. Suppose that the Mexican economy is described in the following graph: a. Economy is currently at point A; develop an appropriate fiscal policy to restore the natural rate of output. Outline the effect of government’s policy on AD and AS curve. (6 points). LRAS SRAS AD
In the economy depicted in the graph, what happens if there is no intervention from policy makers? Use the graph, where LRAS represents long-run aggregate supply, SRAS represents short-run aggregate supply, and AD represents aggregate demand, to demonstrate the answers by shifting the appropriate curve or curves. LRAS SRAS Prices will Aggregate price level (P) decrease. O increase. Output will decrease. Real output (Q) O increase.
Module 7 Ch.17 Fiscal Policy and AD-AS Graph (4 points on each scenario) This problem is adapted and modified from Openstax Ch.17 problem 53. Review ch.11 to 13 about AS-AD, Keynesian, and Neoclassical approaches. 1. Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in response to each of the situations below, and explain why. (2 points) 2. Sketch an AD-AS diagram for each of the situations. Your graph should include the vertical potential GDP, and...
A supply shock is A. an increase in the rate of inflation as a result of expansionary fiscal policy, resulting in a leftward shift of the SRAS curve. B. a sudden increase in the price of an important natural resource, resulting in a leftward shift of the SRAS curve. O C. an increase potential GDP caused by a govemment expenditure multiplier, resulting in a leftward shift of the AD curve. D. an increase in both the inflation and the unemployment...
Detailed explanations please! I am confused
Other things the same, an increase in the expected price level shifts a short-run aggregate supply right b. short-run aggregate supply left c. aggregate-demand right. d. aggregated-demand left Figure 35-1. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregato-demand (AD) curves. On the right-hand diagram, U represents the unemployment rate Phallips Curve SRAS 30 \B 130 15 115 High AD :Low AD 0% 10% 2 Refer to Figure 35-1. The curve...
Consider an economy with an inflationary gap. The advantage of using a contractionary fiscal policy rather than allowing the economy's natural adjustment mechanism to operate is that O A private sector expenditures increase on their own, the policy will stabilize real GDP. OB. It will shorten what might otherwise be a long recession OC. will reduce the inflationary pressure on prices that would otherwise ocur. OD. It wil dose the output gap. Click to select your answer MacBook Air Assume...
Suppose that the Mexican economy is described in the following
graph:
Economy is currently at point A; develop an appropriate fiscal
policy to restore the natural rate of output. Outline the effect of
government’s policy on AD and AS curve.
LRAS SRAS AD
9. For the 2 Graphs below des Unemployment--either the why it shitnt.-either the AD or the SRAS curve will shift-tell mewchp A. Graphs below describe in each situation what happens to P (Prices), YOU MUST SHOW THE SHIFT ON THE GRAPH. (20 points) ls shifts and shifts SRAS P1 AD 01 RGDP d the Republicans agree to increase Government spending by The President (Trump) an trillion to pay for infrastructure and National Defense What happens to: a. Prices-- b. RGDP...
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