Please show me step-by-step explanations, please. Thank you. Use the following graph to help you answer the questions that follow. (Note: You will not be graded for any adjustments made to this graph.)SRPC a1LRPCUNEMPLOYMENT RATE (Percent)Based on your answers to the previous questions, use the black line (plus symbol) to draw the short-run Phillips curve for this economy in 2021 (SRPC1).The short-run Phillips curve isline:Representing the tradeoff between unemployment and inflationO At Natural Real GDPAt the natural rate of unemploymentNow consider the long-run effects of this policy. Suppose, in particular, that following implementation of the policy, the aggregate demand curveremains at ADB. Designate the long-run equilibrium that would follow such a policy as outcome C.Going back to the first graph, place the grey point (star symbol) at outcome C.Because output at point CisNatural Real GDP, the unemployment rate associated with outcome C isthe naturalrate of unemployment.Finally, use the green line (triangie symbol) to draw the long-run Phillips curve (LRPC) on the second graph.This line isline:O Representing the tradeoff between unemployment and inflationO At the natural rate of unemploymentO At Natural Real GDPINFLATION RATE (Percert) In the year 2020, aggregate demand and aggregate supply in the fictional country of Marjan are represented by the curves ADn and AS on thefollowing graph.Suppose Natural Real GDP in this economy is $8 trillion.On the following graph, use the green line (triangle symbol) to plot the long-run aggregate supply (LRAS) curve for this economy.108SRAS107LRAS108105Outcome C104AD103102AD.1011004 S 10121416REAL GDP (Trillians of dollars)Economists have forecast that if the govermment does nothing and the economy continues to grow at the current rate, aggregate demand in 2021 willbe given by the ADA curve, resulting in the outcome illustrated by point A. Ir the government pursues an expansionary policy, aggregate demand in2021 will be given by the ADB curve, resulting in the outcome illustrated by point B.The following table gives projections for the unemployment rates that would occur at point A and point B. Consider what the rate of inflation would bebetween 2020 and 2021, depending on whether the economy moves from the initial price level of 102 to the price level at outcome A or the price levelat outcome B.Complete the table by entering the inflation rate at each potential outcome point.Note: Calculate the inflation rate to two decimal points of precision.Unemployment Rate Inflation Rate5%B2%Use the following graph to help you answer the questions that follow. (Note: You will not be graded for any adjustmments made to this graph.)PRICE LEVEL

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In the year 2020, aggregate demand and aggregate supply in the fictional country of Marjan are represented by the curves AD and AS on the following graph. Suppose Natural Real GDP in this economy is $s trillion. On the fallowing graph, use the green line (triangle symbal) to plot the long-run aggregate supply (LRAS) curve for this ecanomy. SRAS LRAS Odtcome C 101 AD REAL GOP (Trillons of dollars) Economists have forecast that if the govermment does nothing and the economy continues to grow at the current rate, aggregate demand in 2021 wll be given by the ADA curve, resulting in the outcome lustrated by point A. If the government pursues an expansionary policy, aggregate demand in 2021 will be given by the ADg curve, resulting in the outcome illustrated by point B. The following table gives projections for the unemployment rates that would occur at point A and point B. Consider what the rate of infation would be between 2020 and 2021, depending on whether the economy moves from the initial price level of 102 to the price level at outcome A or the price level at outcome B. Complete the table by entering the infation rate at cach potential outcome point. Note: Calculate the infation rate to two decimal points of predision. Unemployment Rate Inflation Rate 5% 2% PRICE LEVEL

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Classical Macro Economics And The Self Regulating Economy

Section: Chapter Questions

Problem 6WNG