PART 1 Below there are the 4 steps for analyzing short run and long run macroeconomic...

PART 1

Below there are the 4 steps for analyzing short run and long run macroeconomic fluctuations. Apply them when answering the following two scenarios:

1.1 How does the increase in AI (Artificial Intelligence) affect the economy (AS-AD)? Follow the 4 steps below and present the excel graph or handwritten graph.

1.2 How does a reduction on exports affect the economy (AS-AD)? Follow the 4 steps below and present the excel graph or handwritten graph..

4 Steps for Analyzing Short-Run and Long-Run Macroeconomic Fluctuations

1. Decide whether the event creates a shift or a movement along the AD curve or the AS curve (or perhaps both).

2. Decide in which direction the curve moves or shifts.

3. Use the graph of AD and AS to determine the impact on output and the price level in the short-run. (create an excel graph with a logical AD and AS for the short run).

4. Use the graph of AD and AS to analyze how the economy moves from its new short-run equilibrium to its long-run equilibrium.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

1. The "business cycle" refers to short-run fluctuations in macroeconomic activity. a long-run increase in GDP....

1. The "business cycle" refers to short-run fluctuations in macroeconomic activity. a long-run increase in GDP. changes in the economy between winter and summer. 2. Which of these would be counted as part of official GDP measures? earnings made by Uber and Lyft drivers casual jobs that are paid in cash "under the table" measures of happiness among a country's citizens the damage to an environment measured in terms of deforestation 3.The U.S. gross domestic product is equal to the...

Distinguish between the short-run and the long-run in a macroeconomic analysis. Why is the relationship between...

Distinguish between the short-run and the long-run in a macroeconomic analysis. Why is the relationship between unemployment and inflation different in the short-run and the long-run?

1. A firm should in the short run and in the long run if...

1. A firm should ________ in the short run and ________ in the long run if it cannot cover its variable costs. shut down; leave the industry shut down; decrease output decrease output; leave the industry decrease output; decrease output 2. Differentiated products may be sold in which of the following? Monopolistic competition and oligopoly Perfect competition and monopolistic competition Monopoly and oligopoly Oligopoly and perfect competition

What is the difference in the short run and the long run? In the short run,...

What is the difference in the short run and the long run? In the short run, A. at least one of the firm's inputs is fixed, while in the long run, at least one of the firm's inputs is variable. B. at least one of the firm's inputs is fixed, while in the long run, the firm is either able to vary all its inputs, adopt new technology, or change the size of its physical plant. C. at least one...

1-The key difference between short run and long run is * 2-In the short- run equilibrium,...

1-The key difference between short run and long run is * 2-In the short- run equilibrium, if Real GDP ˂ Potential GDP, then over time price level will * 3-Okun’s law states that * 4-If the long-run aggregate supply curve is vertical, then changes in aggregate demand affect: * 5-If government reduces taxes, in the short run, *

Macroeconomic goals and macroeconomic equilibrium are the key elements in macroeconomics. What are the long-run macroeconomic...

Macroeconomic goals and macroeconomic equilibrium are the key elements in macroeconomics. What are the long-run macroeconomic goals? What is long-run macroeconomic equilibrium? How the goals are relate to the macroeconomic equilibrium? Suppose that consumers and investors become pessimistic about the future health of the economy. What will happen to aggregate demand and to output?

Long-run macroeconomic equilibrium occurs when

Long-run macroeconomic equilibrium occurs whenSelect one:a. Aggregate demand equals short-run aggregate supply.b. Aggregate demand equals short-run aggregate supply and they intersect at a point on the long-run supply curve.c. Structural and frictional unemployment equals zero.d. Output is above potential GDP.

Long-run Macroeconomic Equilibrium and Stock Market Boom Let us assume the economy reaches its long-run macroeconomic...

Long-run Macroeconomic Equilibrium and Stock Market Boom Let us assume the economy reaches its long-run macroeconomic equilibrium in 2020. When the economy is in the long run macroeconomic equilibrium, the stock market will also reach its boom. This will in turn lead to increases in stock prices more than expected, and the stock prices will stay high for some period. Answer the following questions based on the scenarios of long macroeconomic equilibrium and consequent stock market boom. Which curve will...

A. 1. Explain the difference between the short run and the long run as it relates...

A. 1. Explain the difference between the short run and the long run as it relates to a firm’s production function. 2. Why is this distinction important to a firm’s manager? Explain. B. Short-run decisions are frequently referred to as “constrained” decisions, while long-run decisions are frequently referred to as “planning” decisions. Why is this the case? Explain.

1. Is this cost function a short-run or long-run cost function? ? = 1 3 ?...

1. Is this cost function a short-run or long-run cost function? ? = 1 3 ? 3 − ? 2 + 2? + 90 a. Short-run b. Long-run c. There is information to answer question _____ 2. The ______illustrates the various combinations of L and K that can produce the same level of output. a. Isoquant b. Isocost c. Expansion path _____ 3. For a cost-minimizing firm that chooses the optimal level of L and K, it will always choose...

Subjects