In: Economics
Firms make more investment in new artificial intelligence
program that develops high caliber robots which can...
Firms make more investment in new artificial intelligence
program that develops high caliber robots which can handle large
amount of data and then deliver instructions to workers.
- Explain how the investment plan affect the IS, LM and Ad
curves?
- Suppose the workers’ productivities and worker’s expected
incomes are unaffected. How will this affect the AS curve with and
without this assumption?
- For simplicity, we keep the assumption in part (b). Use your
answers in (a) and (b) to discuss the real interest rate,
employment, real wages, nominal wages, consumption, investment, and
the price level.
- According to the misperceptions theory, modify the above AS-AD
graph to show the short-term equilibrium.