Question
In: Economics
Question 3 For each of the following, explain the impact of each event on the aggregate...
Question 3
- For each of the following, explain the impact of each event on the aggregate demand (AD), short run aggregate supply (SRAS) and long run aggregate supply (LRAS) of Malaysia:
(i) It is announced that Malaysia has just entered into a recession.
(ii) The price of petroleum decreases by another 60%.
- Political and social unrest in Indonesia have caused many foreign firms to relocate their business to Malaysia. (3marks)
- (i)State the endogenous and exogenous factors of economic growth.
(ii) Analyse how technological change affects productivity.
- Table 3 below shows the production patterns of computer chips and fuel injectors for Country Narnia and Somosa without an international trade. Both countries have equal allocations of resources between computer chips and fuel injectors’ productions.
|
Computer chips |
Fuel injectors |
|
|
Country Narnia |
6000 |
4000 |
|
Country Somosa |
2000 |
4000 |
- Explain which country has the comparative advantage in producing computer chips.
- Explain which country has the comparative advantage in producing fuel injectors.
[Total: 20 marks]
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
For each of the following, explain the impact of each event on the aggregate demand (AD),...
For each of the following, explain the impact of each event on
the aggregate demand (AD), short run aggregate supply (SRAS) and
long run aggregate supply (LRAS) of Malaysia:
(i) It is announced that Malaysia has just entered into a
recession.
(ii) The price of petroleum decreases by another 60%.
(iii) Political and social unrest in Indonesia have caused many
foreign firms to relocate their business to Malaysia.
b) (i) State the endogenous and exogenous factors of economic
growth.
(ii)...
For each of the following, explain the impact of each event on the aggregate demand (AD),...
For each of the following, explain the impact of each
event on the aggregate demand (AD), short run aggregate supply
(SRAS) and long run aggregate supply (LRAS) of
Malaysia:
(i) It is announced that Malaysia has just entered into
a recession.
(ii) The price of petroleum decreases by another
60%.
(iii) Political and social unrest in Indonesia have
caused many foreign firms to relocate their business to
Malaysia.
b) (i) State the endogenous and exogenous factors of
economic growth.
(ii)...
Explain whether each of the following events shifts the aggregate-demand curve. For each event that does...
Explain whether each of the following events shifts the
aggregate-demand curve. For each event that does shift AD curve
explain the short-run effects on output and the price level (note:
use AD-SRAS diagrams).
a) (5 points) Government conducts expansionary fiscal
policy.
b) (5 points) Central bank increases money supply.
c) (10 points) Central bank increases money supply, while
government increases taxes.
Question 3. Explain the effects of the following events on Aggregate Demand or Aggregate Supply curves...
Question 3.
Explain the effects of the following events on Aggregate Demand
or Aggregate Supply curves (AD/ SAS decreases or increases) -
Specify the shift in AD/SAS curve and indicate what happens to the
equilibrium price level and RGDP
(a). An increase in Government Spending
(b). Political conflicts leading business owners to become
pessimistic about business's profitability
(c). An earthquake was large enough to cause a cut back in the
supply of fuel
(d). A 5% tax is placed on...
Question 3 Using the aggregate demand and aggregate supply model, explain the effects of the following...
Question 3
Using the aggregate demand and aggregate supply model, explain the
effects of
the following on price and real income in Malaysia.
(a) Consumers are worried with the country’s economic progress. [10
marks]
(b) Firms have begun to use more high-tech machineries for
production. [10 marks]
(c) The Malaysian government has decided to spend on a major revamp
of the public transportation system. [10 marks]
(d) Malaysian higher education system has produced highly skilled
employees. [10 marks]
Each of the following headlines describe an event that will have an effect on desired aggregate...
Each of the following headlines describe an event that will have
an effect on desired aggregate expenditure. What will be the effect
of equilibrium national income? In each case, describe how the
event would be illustrated in the 45 degree diagram.
Covit 19 caused millions of lay offs among Canadians.
Russia agrees to buy more Canadian wheat
High teck firms to cut capital outlays
Finance minister pledges to cut tax rates
U.S imposes restriction on Canadian lumber.
For the following four cases, trace the impact of each shock in the aggregate demand and...
For the following four cases, trace the impact of each shock in the aggregate demand and aggregate supply model by answering the following three questions for each: i. What happens to prices and output in the short run? ii. What happens to prices and output in the long run if the economy is allowed to adjust to long-run equilibrium on its own? iii. If policy makers had intervened to move output back to the natural rate instead of allowing the economy to...
In the following table, determine how each event affects the position of the long-run aggregate supply...
In the following table, determine how each event affects the
position of the long-run aggregate supply curve.
Direction of LRAS Curve Shift
Event
Left
Right
No Shift
The government allows more immigration of working-age
adults.
Right
For environmental and safety reasons, the government requires
that the country’s nuclear power plants be permanently shut
down.
An investment tax credit increases the rate at which firms
acquire machinery and equipment.
In the following table, determine how each event affects the
position of...
Question 1: Use the model of aggregate demand and short-run aggregate supply to explain how each...
Question 1:
Use the model of aggregate demand and
short-run aggregate supply to explain how each of
the following would affect real GDP and the price level in the
short run.
An increase in government purchases
A major decrease in the stock of capital
A trade surplus
An increase in Labor
This is the whole question and I need these answers with the
graph, please... Thank you!
Explain how each of the following affects the aggregate supply and/or aggregate demand curve and equilibrium...
Explain how each of the following affects the aggregate supply
and/or aggregate demand curve and equilibrium GDP and prices in the
short and long run. Does your answer depend on where the economy is
in terms of full employment when the change happens?
Consumer spending increases
Investment spending increases
Government spending is reduced
US exports fall
Tax rates are lowered
Raw material (e.g., energy) prices rise
Wages increase
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