Analyze the short-run effects on the Canadian economy of each of the following events using aggregate...

(b) In response to the tax reform package recently passed in the US, the Canadian government reduces domestic tax rates. [5]

(d) An increase in wages leads to an increase in unit costs for Canadian producers. [5]

(e) As a result of rapid technological change in renewable energy production the price of energy decreases leading to a decrease in unit costs for all Canadian producers and a decrease in the dollar value of Canadian oil exports. [7]

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Analyze the short-run effects on the Canadian economy of each of the following events using aggregate...

Analyze the short-run effects on the Canadian economy of each of the following events using aggregate expenditure (AE) and aggregate demand and supply (AD-AS) diagrams. In each case, identify the cause of any shift or movement along AE, AD, and/or AS and note the effect on national income (Y) and the price level (P). (a) A change in tastes leads Canadian consumers to transfer their video spending from domestic cable TV services to domestic video streaming services. (b) In response...

A5-10. Analyze the short-run effects on the Canadian economy of each of the following events using...

A5-10. Analyze the short-run effects on the Canadian economy of each of the following events using aggregate expenditure (AE) and aggregate demand and supply (AD-AS) diagrams. In each case, identify the cause of any shift or movement along AE, AD, and/or AS and note the effect on national income (Y) and the price level (P). [Hint: See Fig 23-8.] (a) A change in tastes leads Canadian consumers to transfer their video spending from domestic cable...

For each of the following events, discuss the short run and the long run effects on...

For each of the following events, discuss the short run and the long run effects on output and price levels, assuming that the policymakers take no action A) The stock market decreases sharply, reduce customer's wealth B) The federal goverment increases spending on national defense C) A technogical improvement raises productivity

) For each of the following events, explain the short-run and long-run effects on output and...

) For each of the following events, explain the short-run and long-run effects on output and the price level, assuming policymakers take no action. The stock market declines sharply, reducing consumers’ wealth. The federal government increases spending on national defense. A technological improvement raises productivity. A recession overseas causes foreigners to buy fewer U.S. goods.

For each of the following events, explain the short-run and long-run effects on output and the...

For each of the following events, explain the short-run and long-run effects on output and the price level of the Egyptian economy, assuming policymakers take no action. a. The stock market declines sharply, reducing consumers' wealth. b. The government increases spending on national defense. c. A technological improvement raises productivity. d. A recession overseas causes foreigners to buy fewer Egyptian goods and services.

) Explain whether each of the following events shifts the short-run aggregate supply curve, the aggregate...

) Explain whether each of the following events shifts the short-run aggregate supply curve, the aggregate demand curve, both, or neither. For each event that does shift a curve draw a diagram to illustrate the effect on the economy (you don’t have to send me the graphs, but you should draw them on scratch paper for practice). Households decide to save a larger share of their income. Florida orange groves suffer a prolonged period of below-freezing temperatures. Increased job opportunities...

1. For each of the following events, explain the short-run and long-run effects on output and...

1. For each of the following events, explain the short-run and long-run effects on output and the price level, assuming policymakers take no action using a AS-AS-LRAS graph. (8 points) a. The stock market declines sharply, reducing consumers’ wealth. b. The federal government increases spending on national defense. c. A technological improvement raises productivity. d. A recession overseas causes foreigners to buy fewer U.S. goods and services. e. Using AS-AD-LRAS graph, explain the consequences of the budget deficit on output...

Explain how each of the following events would affect the short-run aggregate supply curve. a. An...

Explain how each of the following events would affect the short-run aggregate supply curve. a. An increase in productivity b. A decrease in cost of energy c. A decrease in income tax d. Many firms relocate to China looking for lower wage rate e. A decrease in the number of discouraged workers

Consider an economy described by the following short-run aggregate demand, aggregate supply and long-run aggregate supply...

Consider an economy described by the following short-run aggregate demand, aggregate supply and long-run aggregate supply curve: (short-run aggregate demand curve) P = 200 – Y (short-run aggregate supply curve) P = 40 + Y (long-run aggregate supply curve) Y *= 120 where P = Price Level (price index with base period’s index = 100) and Y = Quantity of Output Draw a diagram below to show equilibrium with P on Y-axis and Y on X-axis by finding equilibrium price...

Using the aggregate demand-aggregate supply diagram, briefly explain 1. the Short-Run and Long-Run effects (on output...

Using the aggregate demand-aggregate supply diagram, briefly explain 1. the Short-Run and Long-Run effects (on output and prices) of an Increase in money supply. 2. the Short-Rin and Long-Run effects (on output and prices) of a negative demand shock 3. how stabilizing monetary policy deal with an adverse supply shock. Course relate to Macroeconomics ch. 10 Introduction to Economic Fluctuations

Subjects