Question

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 energy prices on GDP, inflation and employment. what type of inflation is this.

Answer #1

43)When the aggregate demand curve and the short-run aggregate
supply curve intersect,
Select one:
a. The long-run aggregate supply curve must also intersect at
the same point.
b. Inflation must be increasing.
c. Structural and frictional unemployment equal zero.
d. The economy is in short-run macroeconomic equilibrium.

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.

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...

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.

Draw
and carefully describe a
graph that utilizes the Aggregate Demand/Aggregate Supply model
that would illustrate the current state of the aggregate economy
in the United States.
The graph needs to be clearly labeled and explained carefully.
Make sure that the graph includes an aggregate demand (AD) curve, a
short run aggregate supply (SRAS) curve, and a long run aggregate
supply curve (LRAS, Potential GDP) curve.

Draw and carefully describe a graph that utilizes the Aggregate
Demand/Aggregate Supply model that would illustrate the current
state of the aggregate economy in the United States as of July
2020. The graph must be clearly labeled and explained carefully.
Make sure that the graph includes an aggregate demand (AD) curve, a
short run aggregate supply (SRAS) curve, and a long run aggregate
supply curve (LRAS, Potential GDP) curve.

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,...

Draw an AS-AD curve demonstrating a short run aggregate supply
shock, and the resulting effects on inflation and output.

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...

1) Draw a generic Aggregate Supply (AS) and Aggregate Demand
(AD) curve on a set of axes. Label your vertical axis and your
horizontal axis appropriately and indicate where the macroeconomic
equilibrium is.
(2) Then find a current events article that discusses some
macroeconomic event that will affect either AS or AD. Represent
this effect using a rightward or leftward shift as appropriate.
(3) Interpret the effect on the price level, output, and
unemployment in the context of your model...

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