Question

4) Macroeconomists agree that increases in long run Aggregate Supply are best for the economy. List...

4) Macroeconomists agree that increases in long run Aggregate Supply are best for the economy. List all the possible policies and actions that the federal government could do to encourage increases in labor productivity, capital productivity, and advances in technology. Illustrate one of the them graphically using the Keynesian Model of Aggregate Demand and Aggregate Supply.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Government can pursue following strategies to increase labor, capital productivity and technological improvement-

It can start on the job training where workers will learn new skills to work more efficiently.

It can invest in education to increase human capital.

It can invest in research and development sector to develop new innovations.

Increase in labor productivity, capital productivity or technical innovation leads to rightward shift in AS and LRAS both that results in increase in output and decrease in price level.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Starting from long-run equilibrium, draw an aggregate demand-aggregate supply graph to illustrate the difference between a...
Starting from long-run equilibrium, draw an aggregate demand-aggregate supply graph to illustrate the difference between a long-run and a short-run equilibrium due to an increase in aggregate demand. Once the economy is in the short-run equilibrium, explain and graphically illustrate how long-run equilibrium will be restored.
Based on the Aggregate Supply and Aggregate Demand model, and the IS-LM model, graphically illustrate and...
Based on the Aggregate Supply and Aggregate Demand model, and the IS-LM model, graphically illustrate and explain what effect an increase in the money supply will have on the economy. In your graphs, clearly illustrate the short-run and medium-run equilibria. Draw both the IS-LM and the AD-AS models.
Please, draw Aggregate Demand, Short Run Aggregate Supply, and Long Run Aggregate Supply as if an...
Please, draw Aggregate Demand, Short Run Aggregate Supply, and Long Run Aggregate Supply as if an economy is in both short run and long run equilibrium. Now, Suppose the price of oil (an input in the production of many goods) decreases. Can you please Show how this will affect the model starting from (1) above. What happens to GDP, The Price Level, and Potential Output? Is the economy in a recessionary gap or an inflationary gap? Also, Suppose that consumers...
Suppose that a sudden increase in aggregate demand moves the economy from its long-run equilibrium. (a)...
Suppose that a sudden increase in aggregate demand moves the economy from its long-run equilibrium. (a) Illustrate this change using the aggregate demand-aggregate supply model. (b) What are the effects of this change in the short run and the long run?
with the use of Aggregate demand and the short run and long run aggregate supply curve,...
with the use of Aggregate demand and the short run and long run aggregate supply curve, explain and illustrate how policy marker can use fiscal policy to get the economy out of recession and stop inflation.
Using the aggregate supply and demand model, illustrate what happens in the long run when the...
Using the aggregate supply and demand model, illustrate what happens in the long run when the economy suffers a supply shock. Begin your analysis by assuming the economy has suffered the supply shock in the short run, but has not yet adjusted to it in the long run. (10 points)
Both problems deal with Aggregate demand and Aggregate Supply Question1)Explain whether the following government policies affect...
Both problems deal with Aggregate demand and Aggregate Supply Question1)Explain whether the following government policies affect the aggregate demand curve or the short-run aggregate supply curve and how. 1. The government reduces the minimum nominal wage. 2.The government increases Temporary Assistance to Needy Families (TANF) payments, government transfers to families with dependent children. 3.To reduce the budget deficit, the government announces that households will pay much higher taxes beginning next year. 4.The government reduces military spending. Question 2) In Wageland,...
Suppose the aggregate demand and the short-run aggregate supply of a country INCREASES. a) Starting from...
Suppose the aggregate demand and the short-run aggregate supply of a country INCREASES. a) Starting from a long-run equilibrium, use an AD-AS diagram illustrate the effects of these two changes. Label the initial long-run equilibrium as point A and the resulting short-run equilibrium as point B. b) Suppose policymakers adopt contractionary macroeconomic policies to restore the long run equilibrium. On the same diagram from part a, show the resulting impact on AD or AS curve and label the new long-run...
Using the aggregate supply and demand model, illustrate what will happen in the short run and...
Using the aggregate supply and demand model, illustrate what will happen in the short run and long run when the economy suffers a supply shock.
Use the (short run) Aggregate Demand/Aggregate Supply Model to determine which of the following would cause...
Use the (short run) Aggregate Demand/Aggregate Supply Model to determine which of the following would cause output to rise and the price level to fall. A. A technological change in manufacturing has made labor more productive. B. The federal government raises taxes on businesses. C. The federal government lowers taxes on households. D. The federal government runs a budgetary surplus.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT