Question

List the determinants of aggregate demand (AD shifters). List the determinants of short-run aggregate supply and...

  1. List the determinants of aggregate demand (AD shifters).
  2. List the determinants of short-run aggregate supply and long-run aggregate supply. Why is the LRAS vertical? How does this relate to our natural rate of unemployment?
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Factors that shift the AD-

-Consumption expenditure

-Investment demand

-Government expenditure

-Imports

-And,Exports.

Factors that shift the AS

-Technology

-Productivity

-Wages

-Price of inputs.

Factors that shift the long run aggregate supply

-Productivity

-Increased Labour Market Participation

-Capital Investment – including capital spending by domestic businesses

LRAS is vertical because resources are limited.Therefore,the supply is fixed in the long run and is independent of price.

The point at which the AD=AS=LRAS is the natural rate of unemployment.Natural unemployment rate is also referred to as the full employment rate and lies between 4.5-5.5%.

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
Draw a basic short run aggregate supply (SRAS), aggregate demand (AD) and long-run aggregate supply curve...
Draw a basic short run aggregate supply (SRAS), aggregate demand (AD) and long-run aggregate supply curve (LRAS) that shows the economy in long-run equilibrium.
A. Aggregate Demand, Aggregate Supply, and Equilibrium For a hypothetical economy, the aggregate-demand (AD), short-run aggregate...
A. Aggregate Demand, Aggregate Supply, and Equilibrium For a hypothetical economy, the aggregate-demand (AD), short-run aggregate supply (AS), and long-run aggregate-supply (ASLR) schedules are as follows. The schedules show the GDP price deflator (P) versus real GDP (Q), with Q measured in billions of constant dollars. P AD AS ASLR 80 30 22 30 90 28 24 30 100 26 26 30 110 24 28 30 120 22 30 30 130 20 32 30 A1. GRAPHS: Graph the AD, AS,...
Long-run aggregate supply is equal to 1. short-run aggregate demand. 2. short-run aggregate supply 3. inflation...
Long-run aggregate supply is equal to 1. short-run aggregate demand. 2. short-run aggregate supply 3. inflation minus unemployment. 4. potential output.
Derive the aggregate labor demand curve and define the short-run determinants of aggregate labor demand, labor...
Derive the aggregate labor demand curve and define the short-run determinants of aggregate labor demand, labor supply and labor force participation. How would involuntary unemployment arise in such a labor market? Discuss how the level of real output is determined in the Snowden and Vane Classical Model.
You are given the following equations for the Aggregate Demand (AD) and short-run Aggregate Supply (SAS),...
You are given the following equations for the Aggregate Demand (AD) and short-run Aggregate Supply (SAS), AD Y = 2 Ap + 4 (Ms / P) SAS Y = 750 + 250 P Y N = 1250 Natural Real GDP Ap = 250 Autonomous Spending Ms = 125 Nominal Money Supply 1- Find the equilibrium Price level and Real GDP in the short run. 2- Determine the recessionary or inflationary gap if exist and by how much at short run...
The aggregate-demand (AD), short-run aggregate supply (AS), and long-run aggregate-supply (ASLR) schedules for a given economy...
The aggregate-demand (AD), short-run aggregate supply (AS), and long-run aggregate-supply (ASLR) schedules for a given economy are as follows. The schedules show the GDP price index (P) versus real GDP (Q), with Q measured in trillions of constant (real) dollars. Note that ASLR is potential output (Qf). P AD AS ASLR 60 7 1 3 90 6 2 3 120 5 3 3 140 4 4 3 160 3 5 3 170 2 6 3 1. Graph the AD, AS,...
According to your text when the Long Run Aggregate Supply (LRAS) curve is vertical: a) We...
According to your text when the Long Run Aggregate Supply (LRAS) curve is vertical: a) We are at Natural Unemployment b) Full Employment has been reached c) All of these d) Rightward shifts in the Aggregate Demand Curve can only raise prices
What is the difference in the explanation of the shape of the aggregate demand curve (AD)...
What is the difference in the explanation of the shape of the aggregate demand curve (AD) and a single product demand curve (D)?  After all, both demand curves show an inverse relationship between price and quantity?  What is the difference in the explanation of the shape of the Short Run Aggregate Supply Curve (SRAS) and Long Run Aggregate Supply Curve (LRAS)?
Potential output is equal to A- long-run aggregate supply. B-long run aggregate demand. C-short-run aggregate supply....
Potential output is equal to A- long-run aggregate supply. B-long run aggregate demand. C-short-run aggregate supply. D-short-run aggregate demand.
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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT