Question
In: Economics
ESSAY 1. Draw the Phillips curve. Use the model of aggregate demand and aggregate supply to...
ESSAY
1. Draw the Phillips curve. Use the model of aggregate demand and aggregate supply to show how policy can move the economy from a point on this curve with high inflation to a point with low inflation.
2. Does inflation and unemployment would be related in the long run? Give your explanation and draw the graph.
3. Suppose there is a tornado in western Oklahoma, causing a supply shock for wheat. What will happen in aggregate demand and aggergate supply curve for wheat? How will it affect the Phillips curve? Explain it with graph!
4. How does expected inflation shifts the short-run Phillips curve? Draw the graph to explain!
5. Show the effect of disinflationary monetary policy in the short-run and long-run Phillips curve by drawing the graph!
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
1) Draw a generic Aggregate Supply and Aggregate Demand curve on a set of axes. Label...
1) Draw a generic Aggregate Supply and Aggregate Demand curve on
a set of axes. Label vertical and horizontal axis appropriately and
indicate where the macroeconomic equilibrium is.
2) Then, find a current events article that discusses some
macroeconomic even that will affect either AS or AD. Represent this
effect using a rightward or leftward shift as appropriate.
3) Use your model to interpret the effect of the event from your
article or scenario on the price level, output, input,...
Graphically derive short run Phillips curve with the help of aggregate demand and supply and demand.
Graphically derive short run Phillips curve with the help of aggregate demand and supply and demand.
Draw a diagram with an aggregate demand curve, a short-run aggregate supply curve, and a long-run...
Draw a diagram with an aggregate demand curve, a short-run
aggregate supply curve, and a long-run aggregate supply curve, for
an economy facing a recessionary gap. a) If the government does not
intervene to close this gap, describe what will happen to this
economy over time. Illustrate with a diagram. b) Describe the
policies that the government could use to return the economy to
long-run macroeconomic equilibrium, when it is facing a
recessionary gap. Illustrate with a diagram. c) What...
Draw a diagram with an aggregate demand curve, a short-run aggregate supply curve, and a long-run...
Draw a diagram with an aggregate demand curve, a short-run
aggregate supply curve, and a long-run aggregate supply curve, for
an economy facing a recessionary gap. a) If the government does not
intervene to close this gap, describe what will happen to this
economy over time. Illustrate with a diagram. b) Describe the
policies that the government could use to return the economy to
long-run macroeconomic equilibrium, when it is facing a
recessionary gap. Illustrate with a diagram. c) What...
Draw a basic aggregate demand curve and aggregate supply graph (with LRAS constant) that shows the...
Draw a basic aggregate demand curve and aggregate supply graph
(with LRAS constant) that shows the economy in the long-run
equilibrium.
Assume that there is a large increase in demand for Saudi
exports. Show the resulting short-run equilibrium on your graph. In
this short-run equilibrium, is the unemployment rate likely to be
higher or lower than it was before the increase in the exports?
Briefly explain. Explain how the economy adjusts back to long-run
equilibrium. When the economy has adjusted...
According to the study of Aggregate Supply Curve and the Phillips Curve, a number of different...
According to the study of Aggregate Supply Curve and the
Phillips Curve, a number of different models justifies the
existence of sticky wages and also the ability of aggregate demand
curve to affect output.
(a) Explain these models.
(b) What are their similarities and differences ?
(c) Which of these models do you find the most plausible ?
Discuss the main differences between the original
expectations-augmented Phillips Curve and the curve built on
Rational Expectations.
Consider the aggregate demand/aggregate supply model of Chapter 10. Assume that the long-run aggregate supply curve...
Consider the aggregate demand/aggregate supply model of Chapter
10. Assume that the long-run aggregate supply curve is vertical at
Y = 3,000 while the short-run aggregate supply curve is horizontal
at P = 2. The aggregate demand curve is given by Y = MV(1/P), with
M = 6,000 and V=1.
a) Suppose that there is an adverse supply shock that shifts the
short-run supply curve upwards, to P = 3. What are the values of P
and Y in the...
Consider the aggregate demand/aggregate supply model of Chapter 10. Assume that the long-run aggregate supply curve...
Consider the aggregate demand/aggregate supply model of Chapter
10. Assume that the long-run aggregate supply curve is vertical at
Y = 3,000 while the short-run aggregate supply curve is horizontal
at P = 2. The aggregate demand curve is given by Y = MV(1/P), with
M = 6,000 and V=1.
a) Suppose that there is an adverse supply shock that shifts the
short-run supply curve upwards, to P = 3. What are the values of P
and Y in the...
consider the macroeconomic AD-AS model depicting an aggregate demand curve and a short-run aggregate supply curve....
consider the macroeconomic AD-AS model depicting an aggregate
demand curve and a short-run aggregate supply curve. assume that
changes in national output also represent changes in real GDP.
a. use the AD-AS model above to explain and illustrates the
differences between demand-side measures and supply-side measures
and give an example of each. you also need to mention which markets
are embedded within each curve.
b. use the AD-AS model above to analyse and illustrate the short
run impact of an...
a. Derive the aggregate supply equation from the sticky price model. b. Derive the Phillips curve...
a. Derive the aggregate supply equation from the sticky price
model.
b. Derive the Phillips curve from the aggregate supply
equation.
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