In our Aggregate Demand and Supply model, a decrease in Aggregate Demand would cause which of the following in the short run? Group of answer choices a) neither deflation nor inflation b) deflation and recessio
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In our Aggregate Demand and Supply model, a decrease in Aggregate Demand would cause which of the following in the short run?
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- The consequences of climate change on the economy is a popular topic in the media. Suppose that a series of wildfires destroys crops in the western states at the same time a hurricane destroys refineries on the Gulf Coast. a) Using aggregate demand and supply analysis, explain how output and the inflation rate would be affected in the short and long runs. b) Show your answer graphically.Use an aggregate demand (AD) and aggregate supply (AS) model to respond to the following questions. Explain your answers.(c) Describe a government policy that is likely to cause non-inflationary and sustained growth. (d) Good weather creates a bumper crop in Saskatchewan. How does this affect inflation and GDP in the short-run?The consequences of climate change on the economy is a popular topic in the media. Suppose that a series of wildfires destroys crops in the western states at the same time a hurricane destroys refineries on the Gulf Coast. a) Using aggregate demand and supply analysis, explain how output and the inflation rate would be affected in the short and long runs. b) Show your answer graphically. Note: don't use chat gpt
- The global pandemic has caused tremendous damage to economic and public health across the world. With the vaccine rollout, there are strong expectations for a V-shape recovery in the US economy this and next year. Which of the following statements is inconsistent with the observations/experiences so far? a. From a historical perspective, the pandemic-induced recession is a highly unusual event for the economy and markets. Pandemic is not normally a thing that drives the business cycles. b. Even during the height of pandemic, the L-shape looked unlikely for a number of reasons, including rapid large-scale policy response, political willingness, and favorable financial conditions (such as low interest rate and US$ assets as safe assets). c. Looking beyond 2021, debt overhang (both public and private) is one of the downside risks to the global economic outlook. d. None of the above are inconsistent with the observations/experiences so far.Use the conversation part to answer (B) part. ALEX: Hi, Becky. I’m intrigued to see how macroeconomics allows us to explain recent economic events such as the Great Recession that affected so many people. But there’s one thing I don’t understand. Was the collapse of the housing bubble the only cause of the recession, or were there other factors as well? BECKY: Hi, Alex. I agree that macroeconomic theory offers an entirely new perspective on how the economy works. To answer your question, the crash of the housing market was a major factor but not the only cause of the Great Recession. The professor mentioned that the __________ (options: financial, fiscal, government) system deteriorated as well, an event that deepened the economic downturn even further. ALEX: I see. So the bursting of the housing bubble caused the initial decline in aggregate demand. Then the financial crisis caused aggregate demand to decline even more. Could you also help me understand how to use the aggregate demand…Which of the following statement is true? A) Economic fluctuations are irregular and unpredictible B) Most macroeconomic quantities fluctuate together C) As output falls, unemployment rises D) All of the above
- Comment, on the likely outcome with sufficient arguments? a) Impact on aggregate demand of the economy if imports are greater than exports.b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India.c) Inflation rate in the country has reached 6.73%.A) Distinguish between the short run and the long run as they relate to macroeconomics. Why is the distinction important? B) Use graphical analysis to show how each of the following would affect the economy first in the short run and then in the long run. Assume that the United States is initially operating at its full-employment level of output, that prices and wages are eventually flexible both upward and downward, and that there is no counteracting fiscal or monetary policy. i) Because of a war abroad, the oil supply to the United States is disrupted, sending oil prices rocketing upward. ii) Construction spending on new homes rises dramatically, greatly increasing total U.S. investment spending. iii) Economic recession occurs abroad, significantly reducing foreign purchases of U.S. exports.Comment, on the likely outcome with sufficient arguments? a) Impact on GDP when, Interest rates have come down in the countryb) Impact on balance of payment, when there is a huge demand of vaccines produced in India in South Africa.c) Inflation rate in India reaches negative 2% (-2%)d) The aggregate demand falls short of aggregate supply in the economy
- True or False? Looking along the aggregate demand curve, deflation will lead to a lower level of GDP.Which of the following is likely to occur if an increase in legal immigrants significantly reduces the wages of workers, ceteris paribus? A. Aggregate supply will decrease (shift left). B. Aggregate supply will increase (shift right). C. Aggregate demand will increase (shift right). D. Aggregate demand will decrease (shift left).match the term with the definition: ( ) Expansion beyond previous peak ( ) Expansion from tough to previous peak, marked by raising real GDP ( ) Economic turn down from peak to trough A. recession B. recovery C. prosperity