Homework Answers
A.As a result of increase in government spending,the AD rises because G is a part of AD.AD shifts to the right increasing Rgdp and price level.When output rises unemployment falls.
B.Same as A.The consumption of natural gas will rise and aggregate consumption will rise which will increase AD.
C.When monetary authority increases interest rate,the demand for money falls.This causes the AD to fall and AD shifts to the left reducing price level and Rgdp.When output falls, unemployment rises.
D.Sames as C.When G falls AD falls.
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9. For the 2 Graphs below des Unemployment--either the why it shitnt.-either the AD or the...
Given a downward-sloping aggregate demand (AD) curve and an upward-sloping short-run aggregate supply curve (SRAS), equilibrium...
Given a downward-sloping aggregate demand (AD) curve and an upward-sloping short-run aggregate supply curve (SRAS), equilibrium occurs where the two intersect. The value on the vertical axis is the equilibrium price level and the value on the horizontal axis is the equilibrium value of real GDP or output. What happens to the economy when AD shifts? It is useful to sketch a graph and show the shift. Suppose, for example, interest rates fall or wealth increases due to a stock...
Using the IS-LM and Aggregate Supply-Aggregate Demand (AS-AD) models of Chapter 12 with a flat short-run...
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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...
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1) The Economy cannot be considered fully employed unless the measured unemployment rate is below 1%....
1) The Economy cannot be considered fully employed unless the measured unemployment rate is below 1%. Agree or disagree and explain your answer in a paragraph. What is the current actual u - rate for the US economy as of Sep 2019 Data for 2019 ? Is this unemploymen t rate bel ow or above or equal to u - rate at full employment (usually called natural rate of unemployment or NAIRU)? 2) A) Why would you expect the inflation...
9. Refer to the Figure13-2. If the economy were initially in equilibrium at r0 and E0...
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Match the following: 2. Adam Smith 3. Karl Marx 4. John Maynard Keynes Choices: (2 are...
Match the following: 2. Adam Smith 3. Karl Marx 4. John Maynard Keynes Choices: (2 are not used.) a. invented capitalism b. invented socialism c. founder of modern macroeconomics d. founder of modern market economics e. predicted the end of capitalism 5. If a firm has trouble selling its good, it can a. lower price. b. increase demand. c. decrease supply. d. both a) and b) are correct. 6. People often pay too much for goods because they are not...
FISCAL POLICY IN THEORY: March, 2020: we are on the verge of Congress and the President...
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Match the following: Adam Smith David Ricardo John Maynard Keynes Choices: (2 are not used.) a....
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1. When it comes to financial matters, the views of Aristotle can be stated as:...
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Using the IS-LM and Aggregate Supply-Aggregate Demand (AS-AD) models of Chapter 12 with a flat short-run AS curve (that is, completely sticky prices), suppose the economy is at the natural rate of unemployment and so, at long-run equilibrium. Suddenly, taxes are reduced with no change in government spending. Tell me (or show on a graph) what happens to the IS and/or LM curves. Show on a different graph what happens on the AS-AD diagram in the short-run (drawing in the...
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...
Match the following: Adam Smith David Ricardo John Maynard Keynes Choices: (2 are not used.) a. founder of modern market economics comparative advantage-argument for mutual benefits of international trade comparative advantage-emphasized job displacements of international trade founder of modern macroeconomics invented capitalism duo If a firm has trouble selling its good, it can lower price. increase demand. decrease supply. both a) and b) are correct. 6. People often pay too much for goods because they are not aware of which...
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