Question

ECON Suppose that severe floods destroyed farms, homes, and businesses in the Midwest. Use the aggregate...

ECON

Suppose that severe floods destroyed farms, homes, and businesses in the Midwest. Use the aggregate demand/aggregate supply model, to explain the changes you would expect to take place and the effects you would expect these floods to have on both output and prices

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer:  

Due to flood people demand more commodity and due to this demand curve shifted towards right , here in the area of flood as transportation facility is not available so there will be shortage of supply of commodity . here first demand curve shifted towards right and equilibrium shifted from E1 to E2 and price increases from P1 to P2 , and quaantity demanded increases from Q1 to Q2 . Due to shortage of commodity avialable supply curve shifted from S1 to S2 and equilibrium shifted from E2 to E3 . . As a result price increases and quantity decreases .

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
What might shift the aggregate-supply curve to the right? Use the model of aggregate demand and...
What might shift the aggregate-supply curve to the right? Use the model of aggregate demand and aggregate supply to trace through the short-run and long-run effects of such a shift on output and the price level. Explain.
consider the macroeconomic AD-AS model with an aggregate demand curve and a short-run aggregate supply curve....
consider the macroeconomic AD-AS model with an aggregate demand curve and a short-run aggregate supply curve. assume that changes in national output also represent changes in real GDP. a. use the AD-AS model to explain and illustrates the differences between demand-side measures and supply-side measures and give an example of each. you also need to mention which markets are embedded within each curve. b. use the AD-AS model to analyse and illustrate the short run impact of an increase in...
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.
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.
As described in the chapter, the Federal Reserve in 2008 faced a decrease in aggregate demand...
As described in the chapter, the Federal Reserve in 2008 faced a decrease in aggregate demand caused by the housing and financial crises and a decrease in short-run aggregate supply caused by rising commodity prices. a. Starting from a long-run equilibirium, illustrate the effects of these two changes using both an aggregate-supply/aggregate-demand diagram and a Phillips-curve diagram. On both diagrams, label the initial long-run equipibrim as point A and the resulting short-run equilibrium as point B. For each of the...
This question explores equilibrium in the aggregate demand and aggregate supply model. You will use schedules...
This question explores equilibrium in the aggregate demand and aggregate supply model. You will use schedules for an aggregate demand line and an aggregate supply line to identify the equilibrium price level and real GDP in a macroeconomy. Below, you are provided the schedules for an aggregate demand line and an aggregate supply line. Price Level (Consumer Price Index) Aggregate Demand Real GDP (billions of dollars) Aggregate Supply Real GDP (billions of dollars)    80 $11 $ 8    90...
Describe whether the following changes cause the aggregate demand curve to increase (shift right), decrease (shift...
Describe whether the following changes cause the aggregate demand curve to increase (shift right), decrease (shift left), or neither. (a) The price level increases. (b) Investment decreases. (c) Imports decrease and exports increase. (d) The price level decreases. (e) Consumption increases. (f) Government purchases decrease. Describe whether the following changes cause the long-run aggregate supply curve to increase (shift right), decrease (shift left), or neither. (a) The price level increases. (b) The stock of capital in the economy increases. (c)...
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 the public (households and businesses) expect an increase in inflation within the next 18 months...
Suppose the public (households and businesses) expect an increase in inflation within the next 18 months and the central bank is willing to accommodate changes in the public's behavior. Discuss the impact on interest rate over time if the central bank accommodates the public desires' to hold more money balances by increasing the money supply on a continuing basis and the economy is near capacity. Be sure to discuss both the short run and the long run effects. You do...
The aggregate demand / aggregate supply model is quite useful tool for us to understand the...
The aggregate demand / aggregate supply model is quite useful tool for us to understand the economy. So far, we saw only one change at a time, however, in reality, there can be multiple shocks at the same time. The economy was in long run equilibrium. Assuming all else equal, world scientists collaborated to invent a super vaccine for everyone to be safe from deadly viruses, raising productivity. This makes consumers and businesses optimistic about the economy. At the same...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT