Question

We have used Aggregate Supply and Aggregate Demand analysis to capture the equilibrium in the nation’s product market. We also related this equilibrium to the individual markets and the actions of individual producers. The Covid-19 pandemic has had a sizeable impact on the Nation’s GDP.

a. Please graph the effects that the pandemic has had on the equilibrium state in the Aggregate Product Market. Illustrate what this implies for the labor market?

b. Given the effects of the pandemic in your answer to part (a) above, please graphically illustrate the effects this would have on the U.S. wheat market in a closed economy

. c. Finally, given your answers to parts (a) and (b) above, graphically illustrate the impact this could have on an individual wheat producer’s average profit and discuss the impact on farmland values and producer’s equity, assuming interest rates remain unchanged (Note: in reality, interest rates would change without counteracting policy)?

Answer 1

first we are going to the supply and aggregat demand anlysi to caputre the equilibrium the nation producat market so lets define to the curve of supply and aggregate demand supply and demand also variable point ok but covid 19 effect its also dammages from supply curve and demand curve suply and demand basicly effect on nation economy by quetion is what efeect from economy on supply curve and demand curve so effect is suplly curve going to minece and demand curve going to very poor becouse total supply and total demand not equalibrium point