Homework Answers
Answer: When government follows contractionary fiscal or monetary polcy then its means its trying to suck the liquidity from the market hence under such conditions it'll decrease its spending and can increase the taxes or can do both.So people will have less to spend on things or businesses.It will lead to leftward shift in aggregate Demand Curve.
So according to such explanation Option A will be the correct answer ie economy will move from B to A point.
LRAS SRAS с Price level AD b Уf Real GDP Goods and services market Refer to...
LRAS SRAS с Price level AD b Уf Real GDP Goods and services market Refer to Figure: Fiscal Policy 2. If an economy operates in the short run at point a, then if the government were to implement contractionary fiscal policy. then we should expect a/an decrease in SRAS, which moves the economy toward pointc. increase in AD, which moves the economy toward point decrease in AD, which moves the economy toward point b. ZIL P Yf Real GDP Goods...
Por CPI LRAS, SRAS, AD AD, AD Y, Үр Ү, Yor Real GDP Suppose the economy...
Por CPI LRAS, SRAS, AD AD, AD Y, Үр Ү, Yor Real GDP Suppose the economy is producing the output level Yp, and a positive demand shock shifts the AD, curve to AD2. The economy now has __ A. a recessionary gap and expansionary fiscal policy can close the gap. B. an inflationary gap and expansionary fiscal policy can close the gap. C. a recessionary gap and contractionary fiscal policy can close the gap. D. an inflationary gap and contractionary...
Figure: Monetary Policy 2 LRAS SRAS C Price level a AD b yf Real GDP Goods...
Figure: Monetary Policy 2 LRAS SRAS C Price level a AD b yf Real GDP Goods and services market Refer to Figure: Monetary Policy 2. If an economy operates in the short run at point a, then if the government were to raise the required reserve ratio, then we should expect a/an decrease in SRAS, which moves the economy toward point. Уf Real GDP Goods and services market Refer to Figure: Monetary Policy 2. If an economy operates in the...
LRAS SRAS Price level (base year = 1.00) ADAD, AD $11,600 11,800 12,000 12,200 12,400 12,600...
LRAS SRAS Price level (base year = 1.00) ADAD, AD $11,600 11,800 12,000 12,200 12,400 12,600 Real GDP (billions of base-year dollars) per year 1. Describe why point B is the most desirable point on the graph. What is happening to unemployment at point 2. Point C describes what type of gap? What is the problem with unemployment at this point? Which point on the graph is likely to describe the economy in 2008 - 2009? 3. If unemployment persists...
P LRAS, SRAS, LRAS, SRAS, AD. AD P P. MAD, Y AD 0 Y, Y, Panel...
P LRAS, SRAS, LRAS, SRAS, AD. AD P P. MAD, Y AD 0 Y, Y, Panel (a) Panel (b) LRAS, LRAS, SRA S SRAS, SRAS, SRAS, P AD AD, Y, Y. Panel (c) YY, Panel (d) Expansionary monetary policy would most likely be used to stabilize an economy in A. Panel (a) and Panel (b) B. Panel (c) and Panel (d) C. Panel (a) and Panel (c) D. Panel (b) and Panel (d)
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...
Use the following to answer questions 6-7: Figure: Determining Fiscal Policy LRAS SRAS AD Aggregate Price Level (P) Agg...
Use the following to answer questions 6-7: Figure: Determining Fiscal Policy LRAS SRAS AD Aggregate Price Level (P) Aggregate Output (Q) 6. (Figure: Determining Fiscal Policy) Expansionary fiscal policies could: A) move the economy to full employment. B) move the economy away from full employment. C) lead to a lower price level. D) lead to a lower price level and lower unemployment. 7. (Figure: Determining Fiscal Policy) The best discretionary fiscal policy option is: A) expansionary fiscal policy that leads...
Help me with this! Thank you! SRAS: LRAS SRAS, P P ES P AD AD Y...
Help me with this! Thank you!
SRAS: LRAS SRAS, P P ES P AD AD Y GDP According to the graph shown, what does P on the y-axis stand for? Multiple Choice Inflation rate Average price level Price of GDP Price of Y in the short run, but When the Fed conducts expansionary monetary policy, it in the long run. Multiple Choice causes inflation; boosts output boosts demand; boosts supply causes Inflation; boosts economic growth boosts demand; causes inflation One...
LRAS SRAS Price level AD Real GDP Goods and services market If the economy were operating...
LRAS SRAS Price level AD Real GDP Goods and services market If the economy were operating at point a in Figure 10-8, the real rate of interest would tend to decrease and move the economy toward point b. increase and move the economy toward pointc. increase and move the economy toward point b. decrease and move the economy toward pointc.
2. The diagram below shows the current macroeconomic situation for the economy of Ukraine (LRAS stands...
2. The diagram below shows the current macroeconomic situation for the economy of Ukraine (LRAS stands for Long-Run Aggregate Supply, SRAS stands for Short Run Aggregate Supply and AD for Aggregate Demand. You have been hired as an economic consultant to help the economy move to potential output, Y 0 LRAS SRAS AD Output, y a. Is Ukraine facing a recessionary or inflationary gap? Briefly explain b. Which type of fiscal policy expansionary or contractionary would move the economy of...
LRAS SRAS с Price level AD b Уf Real GDP Goods and services market Refer to Figure: Fiscal Policy 2. If an economy operates in the short run at point a, then if the government were to implement contractionary fiscal policy. then we should expect a/an decrease in SRAS, which moves the economy toward pointc. increase in AD, which moves the economy toward point decrease in AD, which moves the economy toward point b. ZIL P Yf Real GDP Goods...
Por CPI LRAS, SRAS, AD AD, AD Y, Үр Ү, Yor Real GDP Suppose the economy is producing the output level Yp, and a positive demand shock shifts the AD, curve to AD2. The economy now has __ A. a recessionary gap and expansionary fiscal policy can close the gap. B. an inflationary gap and expansionary fiscal policy can close the gap. C. a recessionary gap and contractionary fiscal policy can close the gap. D. an inflationary gap and contractionary...
Figure: Monetary Policy 2 LRAS SRAS C Price level a AD b yf Real GDP Goods and services market Refer to Figure: Monetary Policy 2. If an economy operates in the short run at point a, then if the government were to raise the required reserve ratio, then we should expect a/an decrease in SRAS, which moves the economy toward point. Уf Real GDP Goods and services market Refer to Figure: Monetary Policy 2. If an economy operates in the...
LRAS SRAS Price level (base year = 1.00) ADAD, AD $11,600 11,800 12,000 12,200 12,400 12,600 Real GDP (billions of base-year dollars) per year 1. Describe why point B is the most desirable point on the graph. What is happening to unemployment at point 2. Point C describes what type of gap? What is the problem with unemployment at this point? Which point on the graph is likely to describe the economy in 2008 - 2009? 3. If unemployment persists...
P LRAS, SRAS, LRAS, SRAS, AD. AD P P. MAD, Y AD 0 Y, Y, Panel (a) Panel (b) LRAS, LRAS, SRA S SRAS, SRAS, SRAS, P AD AD, Y, Y. Panel (c) YY, Panel (d) Expansionary monetary policy would most likely be used to stabilize an economy in A. Panel (a) and Panel (b) B. Panel (c) and Panel (d) C. Panel (a) and Panel (c) D. Panel (b) and Panel (d)
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...
Use the following to answer questions 6-7: Figure: Determining Fiscal Policy LRAS SRAS AD Aggregate Price Level (P) Aggregate Output (Q) 6. (Figure: Determining Fiscal Policy) Expansionary fiscal policies could: A) move the economy to full employment. B) move the economy away from full employment. C) lead to a lower price level. D) lead to a lower price level and lower unemployment. 7. (Figure: Determining Fiscal Policy) The best discretionary fiscal policy option is: A) expansionary fiscal policy that leads...
Help me with this! Thank you!
SRAS: LRAS SRAS, P P ES P AD AD Y GDP According to the graph shown, what does P on the y-axis stand for? Multiple Choice Inflation rate Average price level Price of GDP Price of Y in the short run, but When the Fed conducts expansionary monetary policy, it in the long run. Multiple Choice causes inflation; boosts output boosts demand; boosts supply causes Inflation; boosts economic growth boosts demand; causes inflation One...
LRAS SRAS Price level AD Real GDP Goods and services market If the economy were operating at point a in Figure 10-8, the real rate of interest would tend to decrease and move the economy toward point b. increase and move the economy toward pointc. increase and move the economy toward point b. decrease and move the economy toward pointc.
2. The diagram below shows the current macroeconomic situation for the economy of Ukraine (LRAS stands for Long-Run Aggregate Supply, SRAS stands for Short Run Aggregate Supply and AD for Aggregate Demand. You have been hired as an economic consultant to help the economy move to potential output, Y 0 LRAS SRAS AD Output, y a. Is Ukraine facing a recessionary or inflationary gap? Briefly explain b. Which type of fiscal policy expansionary or contractionary would move the economy of...
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