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Q.1 Figure 1 AD and AS Model of Macroeconomics a. Label both axes and all the...
Figure 16-1 Price level LRAS SRAS D AD AD AD Real GDP Refer to Figure 16-1. Suppose the economy is in short-run equilibrium above potential GDP and automatic stabilizers move the economy back to long-run equilibrium. Using the static AD- AS model in the figure above, this would be depicted as a movement from OD to C Eto A. B to A A to E. Cto B.
The assignment is about drawing the graph of AD, SRAS and LRAS and writing down what would happen under the condition "decrease in personal income taxes" Need to write down everything that happens by following the seven steps: 1) What would happen under the condition? (Whether AD, SRAS, or LRAS would change? And in which direction the curve would shift?) 2) Where is the new short-run equilibrium? (You need to mark the point in the graph.) 3) What changed in...
The graphs illustrate an initial equilibrium for the economy. Suppose that oil prices temporarily decrease 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 equilibriums resulting from this change. Then, indicate what happens to the price level and GDP in the short run and in the long run. Short-run graph Long-run graph...
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
Price level or GDP deflator SRAS SRAS, SRAS, AD AD AD 0 Output or RGÓP Suppose the short-run macroeconomic equilibrium is at point A. In the short run, a positive supply shock would move the equilibrium to A point E. B. point B. C. point H D. point
The graphs illustrate an initial equilibrium for the economy. Suppose that the stock market broadly decreases. 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 equilibriums resulting from this change. Then, indicate what happens to the price level and GDP in the short run and in the long run. Short-run graph Long-run...
The graph depicts a dynamic aggregate demand (AD) and aggregate supply (AS) model of the economy. Suppose that in 2003, the economy is in macroeconomic equilibrium, with GDP at GDP (year 1). The Fed projects that in 2004, the aggregate demand curve will be AD (year 2), that potential real GDP will be $12.45 trillion (GDP (year 2), and that actual real GDP will be $12.39 trillion LRAS (year 1) LRAS (year 2) SRAS (ycar1) SRAS (year 2 ear Year...
Price level or GDP deflator SRAS, SRAS SRAS, (В 11 AD, AD ADZ 0 Output or RGOP Suppose the short-run macroeconomic equilibrium is at point A. In the short run, an increase in the existing stock of physical capital would move the equilibrium to A point F B. pointi C. point D.point G
1. What is on the horizontal axis and the vertical axis of the AD-AS graph? Or explain what Y and P are, and how they are measured. 2. What is the major difference between the AE model and the AD-AS model? 3. Suppose a recession is characterized by a decrease in real GDP and a decrease in the price level. What could be the cause of the recession? 4. Suppose a recession is characterized by a decrease in real GDP...
Price Level LRAS SRAS AD AD AD Yo Y Yo Yo If the economy in the graph shown is currently at point B, and the government enacts contractionary fiscal policy, in the short run the economy will most likely move to point Multiple Choice o o It is likely to be unaffected and stay at point B o o