Mention two (02) important factors that can cause a negative demand shock to the economy, and two (02) important factors that can cause a negative supply shock to the economy. Explain briefly each of them.
Mention two (02) important factors that can cause a negative demand shock to the economy, and...
The two most important factors that cause the money demand curve to shift are A. the nominal interest rate and the money supply. B. real GDP and the price level. C. nominal GDP and the Fed. D. the price level and the nominal interest rate.
Question 6 An increase in aggregate demand (AD) can cause an increase in cyclical unemployment. a recession in the economy. an expansion in the economy. Question 9 Which of the following would cause a negative demand shock (shift to the left) in aggregate demand? decreased availability of business capital increased government spending production costs falling Question 10For aggregate demand and aggregate supply to be an economic model, the equilibrium aggregate price level and equilibrium aggregate real GDP should only consider long run curves. be considered in individual markets. intersect.
Aggregate Demand and Aggregate Supply - End of Chapter Problem 6. Suppose that the economy is currently at potential output. Also suppose that you are an economic policy maker, and that a college economics student asks you to rank, if possible, your most preferred to least preferred type of shock: positive demand shock, negative demand shock, positive supply shock, negative supply shock. How would you rank them? Most preferred Positive demand shock Negative demand shock Positive supply shock Negative supply...
Consider a standard Keynesian economy. Which shock would cause the slope of the money demand curve to become steeper? A. Money demand becomes less sensitive to changes in the interest rate B. Money demand becomes more sensitive to changes in the interest rate C. Money demand becomes more sensitive to changes in the output D. Money demand becomes less sensitive to changes in the output
Mention any two factors that determine the demand for education in less developed countries.
Various factors cause a demand curve to shift. List four different factors and explain them fully as determinants of demand.
Various factors cause a demand curve to shift. List four different factors and explain them fully as determinants of demand.
a. c. Consider a typical aggregate demand and supply curve of an economy operating at its long-run equilibrium. Express the condition for long-run equilibrium and graphically show the long- run equilibrium of this economy in an AD-AS diagram. b. Explain and graphically show how a positive AD shock affects the short-run equilibrium of this economy. How do the price level and rGDP change in the short term as a result? Does the positive AD shock result in a recessionary gap...
If the economy begins at long-run equilibrium at potential output when a negative aggregate demand shock occurs,l initially there will be a ____________________ equilibrium because prices are _____________ in the short run. a. new long-run equilibrium below potential output, sticky b. new short-run equilibrium below potential output, sticky c. new short-run equilibrium above potential output, sticky d. new short-run equilibrium below potential output, flexible
Explain how a free working market will bring the economy to equilibrium. Why is equilibrium important? When constructing supply and demand curves we assume that all factors affecting supply and demand remain constant except price. Explain what happens to equilibrium when price changes. Explain what happens to equilibrium when any of the factors, other than price, change.