Question

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

Answer #1

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Draw an AS-AD curve demonstrating an aggregate demand shock
and the resulting effects of inflation and output.

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.

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...

Assume that the long-run aggregate supply curve is vertical at Y
= 3,000 while the short-run aggregate supply curve is horizontal at
P = 1.0. Suppose that the country experiences an important crop
failure due to severe tornadoes. What will be the immediate impact
following the shock?
Select one:
a. the short-run aggregate supply curve shifts up, the price
level rises, and output falls.
b. the price level falls, output falls, and the short-run
aggregate supply curve shifts down.
c....

What is the effect of an adverse supply shock?
a. The long-run aggregate supply curve shifts to the left.
b. The short-run aggregate supply curve shifts to the right.
c. The long-run Phillips curve shifts to the left.
d. The short-run Phillips curve shifts to the right.

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...

Long-run aggregate supply is equal to
1. short-run aggregate demand.
2. short-run aggregate supply
3. inflation minus unemployment.
4. potential output.

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,...

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.

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,...

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