Question
In: Economics
Use the AD/AS model to illustrate what happens to United States equilibrium GDP and the price...
Use the AD/AS model to illustrate what happens to United States equilibrium GDP and the price level under the following scenarios. Also state what happens to national income and unemployment.
1. Canada, the number one destination of U.S. exports, goes into recession.
2. Energy prices rise throughout the economy.
3. Wages fall throughout the economy.
4. Congress passes a law lowering the income tax.
5. Businesses become more optimistic and raise their forecast ROI.
Include a caption! Beside or below each graph, explain why you shifted the curve.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Use the AD/AS model to illustrate what happens to United States equilibrium GDP and the price...
Use the AD/AS model to illustrate what happens to United States
equilibrium GDP and the price level under the following
scenarios. Also state what happens to national income
and unemployment. Illustrate only short run fluctuations
in real GDP.
1.Canada, the number one destination of U.S. exports, goes into
recession.
2.Energy prices rise throughout the economy.
3.Wages fall throughout the economy.
4.Congress passes a law lowering the income tax.
5.Businesses become more optimistic and raise their forecast
ROI.
Include a caption! Beside or...
Beginning at long-run equilibrium use the AS-AD model to illustrate what happens to output and inflation...
Beginning at long-run equilibrium use the AS-AD model to
illustrate what happens to output and inflation in the short-run
and the long-run when:
a) imports rise
b) the expected inflation rate rises
c) consumers experience a change in attitudes such that they
consume a larger part of their income (rather than saving it)
(a) Using the Aggregate Demand (AD) model diagram, illustrate what happens to the equilibrium level of...
(a) Using the Aggregate Demand (AD) model diagram, illustrate
what happens to the equilibrium level of aggregate output when the
Federal Reserve (Fed) engages in a tightening of monetary policy.
Make sure you properly label all the axes and curves.
(b) Would the Federal Reserve be more likely to engage in a
tightening of monetary policy during an expansion or recession?
Explain in one sentence.
(c) Has the Federal Reserve recently (past 1-2 months) been
engaging in a tightening of...
For each of the following situations, use the AD/AS model to describe what happens to the price level and output in the United States in the short run.
For each of the following situations, use the AD/AS model to describe what happens to the price level and output in the United States in the short run. In each case, assume the economy starts in long-run equilibrium, and describe the appropriate shift in the AS or AD curve. Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. a. A stock market crash reduces people's wealth. Aggregate...
1. Using the Aggregate Demand (AD) model diagram, illustrate what happens to the equilibrium level of...
1. Using the Aggregate Demand (AD) model diagram, illustrate
what happens to the equilibrium level of aggregate output when
firms start to feel more optimistic about the future and increase
their investment. (Hint: What happens to the IS curve?) Make sure
you properly label all the axes and curves. Will this lead more
likely to an expansion or recession?
2. Using the Aggregate Demand (AD) model diagram, illustrate
what happens to the equilibrium level of aggregate output when the
Federal...
1. Using the AS-AD model diagram, illustrate what happens to the LONG-RUN and SHORT-RUN equilibrium level...
1. Using the AS-AD model diagram, illustrate what happens to the
LONG-RUN and SHORT-RUN equilibrium level of aggregate output and
inflation, when the economy is hit by a negative (adverse) demand
shock and there is NO POLICY response. Suppose the economy is at a
long-run equilibrium before it is hit by the negative demand shock.
Make sure you properly label all the axes and curves. Will the
negative demand shock more likely lead to an expansion or recession
in the...
For each of the following situations, use an AD/AS model to describe what happens to price...
For each of the following situations, use an AD/AS model to
describe what happens to price levels and output in Canada in the
short run. In each case, assume the economy starts in long- and
short-run equilibrium, and describe the appropriate shifts in the
AS or AD curves.
Instructions: You may select more than one answer.
Click the box with a check mark for correct answers, and click to
empty the box for the wrong answers.
a. A stock market...
For each of the following situations, use an AD/AS model to describe what happens to price...
For
each of the following situations, use an AD/AS model to describe
what happens to price levels and output in the United States in the
short run. In each case assume the economy starts at potential GDP,
and describe the appropriate shifts in the AS or AD curves.
a. A stock market crash reduces people’s wealth.
Yes/No Aggregate demand shifts to the left
Yes/No Aggregate demand shifts to the right
Yes/No Aggregate supply shifts to the left
Yes/No Aggregate...
1. Using the demand and supply for loanable funds and the AD-AS model, illustrate what happens...
1. Using the demand and supply for loanable funds and the AD-AS
model, illustrate what happens when the Federal Reserve decides to
lower the reserve requirement.
a) Using the AS-AD model, graphically illustrate and describe in words what happens to the long-run...
a) Using the AS-AD model, graphically illustrate and describe in
words what happens to the long-run and short-run equilibrium level
of aggregate output and inflation, when the economy is hit by a
negative demand shock and the fiscal policy responds to the shock.
Make sure you properly label all the axes and curves. Be specific
to describe how the fiscal policy can act in this case.
b) Describe the government spending multiplier and how it would
affect the fiscal policy...
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