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could you elaborate? or might as well explain the graph?
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- Assume that an economy is initially operating at the natural rate of output (full employmentoutput). Use the AD-AS model to illustrate graphically the effects on price and output of areduction in government spending. Explain your assumptions with respect to the range ofaggregate supply of your analysis.Considering the growing potential threat of terrorists’ attacks worldwide, the President of an economyapproved a fiscal spending of $24 billion to upgrade its national defense. a. Starting in a long-run equilibrium, draw a well-labelled AD-SRAS-LRAS diagram for the economy. b. Use the same diagram in part (a) to show the SR effect on the economy’s GDP (Y), the price level, andunemployment when the federal government increases its spending on national defense. c. To stabilize the price level and the economy’s GDP, what kind of monetary policy should the economyadopt? Illustrate your answer in the same diagram in (a).Illustrate and interpretthe short-run andlong-run aggregatesupply curves
- Consider the graph below. Suppose that the economy is at point A Price Level LRAS SRAS A AD + Y (GDP) Currently, this economy Select in the long run, what will happen in this economy? The ISelect) curvets) will ISelect) because ISelect The price level will Select) GDP will (Select)Assume an economy operates in the intermediaterange of its aggregate supply curve. State thedirection of shift for the aggregate demandor aggregate supply curve for each of thefollowing changes in conditions. What is theeffect on the price level? On real GDP? Onemployment?a. The price of crude oil rises significantly.b. Spending on national defense doubles.c. The costs of imported goods increase.d. An improvement in technology raises laborproductivity.Which of the following would shift the SRAS curve to the right (ignoring any potential effect on LRAS)? O The world price of oil increases rapidly without warning but is not expected to remain at the new high level permanently. However, in the short run, it is more costly for all firms to produce goods and services. The government introduces a set of new regulations that make it more costly for firms to produce and sell goods and services. These regulations are expected to be permanent. O The interest rate decreases, spurring investment spending. There is an increase in government spending. O There is a technological improvement that allows firms to reduce their costs of production permanently. The following graph shows the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve for an economy. Suppose the world price of oil decreases rapidly without warning but is not expected to remain at the new low level permanently. However, in the short run, it is…
- Autonomous Consumption R535mMarginal propensity to consume is 0.75Investment Spending R322mGovernment Spending R300mImports R175m + 0.08YExports R283mTaxes = 0.1YFull employment level of output is R3 483m Calculate the value of induced imports in thiseconomy, given the equilibrium level of output.Identify three factors that can shift the aggregatedemand curve to the right and three different factorsthat can shift the aggregate demand curve to the leftWhat is the role of daynamic in macroeconomic? What are the diffrence between static and daynamic?
- Assume an ecomy operates in the intermediate range of its aggregate supply curve. State the direction of shif for the aggregate demand curve or aggregate supply curve for each of the following changes in conditions. What is the effect on the price level? On real GDP? On employment?What is the macroeconomic equilibrium? The macroeconomic equilibrium is real GDP of $ ___ trillion and a price level is ___. SS attached thanksWhat is the intermediate zone of the SRAS curve? Willariseinoutputbeaccompaniedbyariseorafallin the price level in this zone?