QUESTION 31 Figure 13-5 shows the short-run macroeconomic equilibrium of an economy at Point A. In...
If the economy is operating at e no + Is the economy in short-run macroeconomic equilibrium? Explain Is the economy in long-run macroeconomic equilibrium? Explain What type of gap exists in this economy? What will happen to the size of the output gap in the long run? LRAS SRASI AD Above full employed equilibrium
()-run equilibrium occurs at the intersection of the aggregate demand curve, AD, and the short-run aggregate supply curve, SRAS.() ▼ Long Short -run equilibrium occurs at the intersection of AD and the long-run aggregate supply curve, LRAS. Any unanticipated shifts in aggregate demand or supply are called aggregate demand or aggregate supply() ▼ shocks externalities . When aggregate demand decreases while aggregate supply is stable,() ▼ a recessionary an inflationary gap can occur, defined as the difference between how much...
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...
The accompanying graph illstrates an economy in long-run equilibrium which is denoted by point FiR Suppose a new technology is discovered which increases productivity. In the graph, demonstrate how the economy moves to its new long-run equilibrium by shifting the appropriate curves and placing point ELR at the new long- run equilibrium. LRAS SRAS LR In the long run, the aggregate price level decreases and real GDP (aggregate output) AD increases. Real GDP
Refer to the figure below. Suppose the economy is in a short-run equilibrium at output Y3 and inflation rate π2. The economy is currently experiencing ______, and the correct monetary policy response to this situation, to return the economy to potential GDP, is to ______. Select one: a. a recessionary gap; raise taxes b. an expansionary gap; cut taxes c. a recessionary gap; increase the money supply d. an expansionary gap; decrease the money supply Inflation rate ASI AS2 AD...
Figure: AD–AS Refer to Figure: AD–AS. Assume that the economy is in long-run equilibrium. If the Federal Reserve were to lower the targeted federal funds rate we would most likely expect: there will be a downward movement along the aggregate demand curve AD1. the aggregate demand curve will stay unchanged at AD1. the aggregate demand curve will shift to AD3. the aggregate demand curve will shift to AD2. LRAS Aggregate price level SRAS AD, AD AD, Y₂ YpY, Real GDP
The graph shows the economy in long-run equilibrium Then the world economy expands and the demand for U.S.-produced goods increases Price level (GDP deflator, 2009-100) 14 Draw a curve that shows 1) the effect of increased demand for U.S.-produced goods. Label it 1 2) the effect of a rising money wage rate that returns the economy to full employment. Label it 2. Draw a point at the new long-run equilibrium 13 SAS 12 An economy is in a long-run equilibrium....
Check And < Question 11 of 13 > The graphs below illustrate an initial equilibrium for the economy. Suppose that investment spending falls. 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 equilibria resulting from this change. Then answer what happens to the price level and GDP. Short-run graph SRAS Short-run equilibrium Aggregate price...
The figure to the right shows an economy in an initial long-run equilibrium at point LRAS, aUsing the line drawing fool, show how, if at all the equilibrium real GDP and the long-run equilibrium price level are affected by a reduction in the quantity of money in circulation Properly label this line. Carefully follow the instructions above, and only draw the required objects b. According to your graph, the equilibrium price level real GDP while the equilibrium Price Level RGDP...
plz thanks 7. Suppose the economy is currently in short run macroeconomic equilibrium, with actual GDP bigger than potential GDP. (a) Depict this situation using AD-AS, being sure to label all curves and axes. What is the gap called? 5 points. (b) In the long run, what will happen to prices and output? Depict graphically and explain. 5 points.