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Econ Question
The equations for the AD and AS curves are given by: AD : YAD = 710 − 30P + 5G AS : YAS = 10 + 5P − 2Poil where Y is real GDP, P is the price level, G is the government purchases, and Poil is the world price of oil. a) What is the value of the simple multiplier? b) Write down the equilibrium condition. c) Solve for the equilibrium value of real GDP and the price level...
The economy of Neverland has the following AD and AS schedules. Denote Yad as the level...
The economy of Neverland has the following AD and AS schedules. Denote Yad as the level of real GDP along the AD curve; let Yas be the level of real GDP along the AS curve. GDP is shown in billions of 2002 dollars. (10 marks) Price Level 90 100 110 120 130 140 YAD 1100 1000 900 800 700 600 YAS 750 825 900 975 1050 1125 a. Plot the AD and AS curves on a scale diagram. b. What...
What reference? Name: For each of the following events, use an AD-AS diagram to show the...
What reference?
Name: For each of the following events, use an AD-AS diagram to show the short-run and long-run effects on output and the price level (inflation rate); identify any output gap. Assume the economy starts in long run equilibrium. (1) The government reduces income taxes AS P AD (2) A decrease in consumer confidence leads to lower consumption spending AS P. AD AD-AS practice assignment.pdf 2/2 (3) The Fed decreases the money supply AS Pe K AD y* (4)...
1. Let the AD and AS be as follows: AD: Y=600 - 15P+ 10G AS: Y...
1. Let the AD and AS be as follows: AD: Y=600 - 15P+ 10G AS: Y = 10 + 10P - 10W where Y is the real GDP, P is the price level (GDP deflator), G is government purchases, and Wis the index of wages. a. IfG - 200 and W-100. find the equilibrium real GDP and price level in the economy. b. What is the simple multiplier in this economy? Explain how you got the number (2) c. If...
The graph below depicts the aggregate demand, Irrun aggregate supply, and short-run aggregate supply curves for...
The graph below depicts the aggregate demand, Irrun aggregate supply, and short-run aggregate supply curves for the United States at an initial long-run macroeconomic equilibrium Price level] (P) LRAS SRAS Real GDP Consider a situation in which two things happen simultaneously: there is a deterioration of institutions, and the federal government massively increases spending. Which of the graphs below illustrates the shifts in this model given this situation? Price level Price level (P) (P) URAS LRAS, LRAS SRAS SRAS SRAS...
Consider an economy with a natural unemployment rate, u, of 4%. The expectations-augmented Philli...
Consider an economy with a natural unemployment rate, u, of 4%. The expectations-augmented Phillips curve is Assume that Okun's Law holds so that a 1 percentage point increase in the unemployment rate maintained for one year reduces GDP by 2% of full employment output. Note: Okun's Law can be expressed as: 2( u-u) a. Consider a two-year disinflation. In the first year actual inflation, π' is 14% and expected inflation, π.s 18%. What is the first year unemployment rate? %...
20. From the short-run equilibrium at point B, suppose the aggregate demand remains un- changed and...
20. From the short-run equilibrium at point B, suppose the aggregate demand remains un- changed and there are no other shocks hitting the economy. The economy can adjust itself and move to the long-run equilibrium without policy intervention. Which of the following is true? A. The economy will return to the long-run equilibrium (point A), where the real GDP equals Y* and the price level is P*. B. The economy will move to a new long-run equilibrium, where the real...
The IS and LM curves for the economy have the following equations: Y = k (Ap...
The IS and LM curves for the economy have the following equations: Y = k (Ap - 50 i) Y = 2(Ms / P) + 100 i where k = 2, Ap = 4000, Ms = 3000 and P =1 Find the equilibrium level of income and the equilibrium interest rate. Complete following table which represents points on aggregate demand curve. Price Interest Rate Real GDP .8 __________ 1 _______________________ 1.5 ____________ 2.0 _____________
Question 16 If the price level increases in the United States relative to foreign...
Question 16 (1 point)If the price level increases in the United States relative to foreign countries, then American consumers will purchase more foreign goods and fewer U.S. goods. This statement describes:Question 16 options:the output effect.the shift-of-spending effect.the real-balances effect.the foreign purchases effect.Question 17 (1 point)Refer to the diagram. If the initial aggregate demand and supply curves are AD0 and AS0, the equilibrium price level and level of real domestic output will be:Question 17 options:E and B, respectively.F and A, respectively.G...
Please answer these macro multiple choices Which of the following is a defining characteristic of the...
Please answer these macro multiple choices
Which of the following is a defining characteristic of the AD/AS macro model in the short run? O A. firms cannot operate near their normal capacity O B. technology used in production is endogenous and variable O C. factor supplies are assumed to be constant OD. the level of potential output fluctuates with the price level O E. factor prices are assumed to be constant Assume the economy is initially in equilibrium with desired...
The economy of Neverland has the following AD and AS schedules. Denote Yad as the level of real GDP along the AD curve; let Yas be the level of real GDP along the AS curve. GDP is shown in billions of 2002 dollars. (10 marks) Price Level 90 100 110 120 130 140 YAD 1100 1000 900 800 700 600 YAS 750 825 900 975 1050 1125 a. Plot the AD and AS curves on a scale diagram. b. What...
What reference?
Name: For each of the following events, use an AD-AS diagram to show the short-run and long-run effects on output and the price level (inflation rate); identify any output gap. Assume the economy starts in long run equilibrium. (1) The government reduces income taxes AS P AD (2) A decrease in consumer confidence leads to lower consumption spending AS P. AD AD-AS practice assignment.pdf 2/2 (3) The Fed decreases the money supply AS Pe K AD y* (4)...
1. Let the AD and AS be as follows: AD: Y=600 - 15P+ 10G AS: Y = 10 + 10P - 10W where Y is the real GDP, P is the price level (GDP deflator), G is government purchases, and Wis the index of wages. a. IfG - 200 and W-100. find the equilibrium real GDP and price level in the economy. b. What is the simple multiplier in this economy? Explain how you got the number (2) c. If...
The graph below depicts the aggregate demand, Irrun aggregate supply, and short-run aggregate supply curves for the United States at an initial long-run macroeconomic equilibrium Price level] (P) LRAS SRAS Real GDP Consider a situation in which two things happen simultaneously: there is a deterioration of institutions, and the federal government massively increases spending. Which of the graphs below illustrates the shifts in this model given this situation? Price level Price level (P) (P) URAS LRAS, LRAS SRAS SRAS SRAS...
Consider an economy with a natural unemployment rate, u, of 4%. The expectations-augmented Phillips curve is Assume that Okun's Law holds so that a 1 percentage point increase in the unemployment rate maintained for one year reduces GDP by 2% of full employment output. Note: Okun's Law can be expressed as: 2( u-u) a. Consider a two-year disinflation. In the first year actual inflation, π' is 14% and expected inflation, π.s 18%. What is the first year unemployment rate? %...
20. From the short-run equilibrium at point B, suppose the aggregate demand remains un- changed and there are no other shocks hitting the economy. The economy can adjust itself and move to the long-run equilibrium without policy intervention. Which of the following is true? A. The economy will return to the long-run equilibrium (point A), where the real GDP equals Y* and the price level is P*. B. The economy will move to a new long-run equilibrium, where the real...
Please answer these macro multiple choices
Which of the following is a defining characteristic of the AD/AS macro model in the short run? O A. firms cannot operate near their normal capacity O B. technology used in production is endogenous and variable O C. factor supplies are assumed to be constant OD. the level of potential output fluctuates with the price level O E. factor prices are assumed to be constant Assume the economy is initially in equilibrium with desired...
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