Assume that the present price level is P1. Price Level Price Level A B) D LAS CA Real GOP с LAS AS AS * AD Real GDP AD Price Level Price Level 8 LAS Real Gop D Real GOP AD AS Refer to the above graph to answer this question. Which graph illustrates employment equilibrium? A) C AD
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- Create a graph for an aggregate demand curve. Use the variable ‘Price Level’ for the vertical axis and ‘Real GDP’ for the horizontal axis. In your answer, explain why there is an inverse relationship between the price level and real GDP. Use your graph to illustrate your explanations. Also, discuss determinants of Aggregate Demandor factors that shift Aggregate Demand curve.Suppose concerns about the size of the federal budget deficit lead the U.S. Congress to cut all funding for research and development for ten years. Assuming this has an impact on technology growth, what does the AD/AS model predict would be the likely effect on equilibrium GDP and the price level?Assume that prices are flexible upward but not downward. Decide the effect onthe equilibrium price level and level of output of the following: Firms become less optimistic about future business decisions
- What are the factors other than price that can shift aggregate demand curve interms of investment and consumption? Also explain graphically.Real GDP Real GDPDemanded, Price Level Supplied,Billions (Price Index) Billions$100 300 $450200 250 400300 200 300400 150 200500 100 100 Use these sets of data to graph the aggregate demandand aggregate supply curves. What is the equilibriumprice level and the equilibrium level of real output inthis hypothetical economy? Is the equilibrium real output also necessarily the full-employment real output?Explain.b. Why will a price level of 150 not be an equilibriumprice level in this economy? Why not 250?c. Suppose that buyers desire to purchase $200 billion ofextra real output at each price level. Sketch in the newaggregate demand curve as AD1. What factors mightcause this change in aggregate demand? What is thenew equilibrium price level and level of real output?Suppose the economy of Hawkland is initially at full employment. Currently real GDP is $20 trillion, theprice level is 120, the money wage is $36/hour, the full employment quantity of labor is 300 billionhours per year, and the current unemployment rate is 6%. Draw a fully labeled graph depicting the aggregate goods and services market in Hawkland.Be sure to label all axes and include numerical values for variables on the axes where relevant. Providea brief explanation to the side and show any necessary calculations. Label any relevant curves with azero (0, for example: AD0) and use a zero in a circle to clearly label the initial equilibrium
- R The model of aggregate demand/aggregate supply... O Identifies the equilibrium GDP and price level as well as the gap between the equilibrium GDP and the potential GDP Identifies the potential GDP and price level as well as the gap between the price level and the inflation. O Identifies the equilibrium GDP the economy will reach in the long A run O Identifies the equilibrium quantity and price for consumer goods 10 % 5 T 6 O Y Com liji fa 887 & 7 7 U 8 4 f10 num lk. 8 ( 5 9 開E MINDTAP Wage Rate 3 SL3 Su Su * T 5 L يا (a) Real GDP Labor (L) Q₁ . 3 Q=TLK) LMAS LHAS LHAS Price Level L Labor (L) 0 (b) Search Real GDP (c) Refer to Exhibit 17-4 Assume that the starting point in graphs (a) and (b) in Exhibit 17-4 is point 1. After a decrease in income taxes, there would be a which would cause a movement along the production function from point 1 to point The result would be a shift of the LRAS curve from LRAS; to. resulting in On rightward shift of the labor supply curve from SL1 to SL2: movement along the production function to point 3: LRAS): a shrinking economy O b. leftward shift of the labor supply curve from S1 to SL3; movement along the production function to point 3: LRAS); a shrinking economy O rightward shift of the labor supply curve from St1 to St.2: movement along the production function to point 2: LRAS2: economic growth O d. leftward shift of the labor supply curve from SL1 to SL3; movement along the production function to point 2. LRAS2, economic…What is the role of daynamic in macroeconomic? What are the diffrence between static and daynamic?
- As described in the article entitled "The Thomy Economics of legal immigration, Arizona adopted legislation that restricted (by as much as 40%) the number of legal immigrants coming into the state. This had the economic effect of OA Reducing Arizona's GOP but had the intended effect of atering production processes as employers hired more workers OB increasing overall output in the state as the supply of goods increased (as costs were falling) C Reducing Arizona's GDP OD. Decreasing the wage rates for and increasing the total employment of unsalted labor in the sAssume an economy operates in the intermediaterange of its aggregate supply curve. State thedirection of shift for the aggregate demandor aggregate supply curve for each of thefollowing changes in conditions. What is theeffect on the price level? On real GDP? Onemployment?a. The price of crude oil rises significantly.b. Spending on national defense doubles.c. The costs of imported goods increase.d. An improvement in technology raises laborproductivity.Use the following diagram to answer this question Price level or GDP deflator Ro 41- SRAS₂ ----- AD₂ SRAS, SRAS, -11110 AD₁ AD₁ Output or RGDP Suppose the short-run macroeconomic equilibrium is at point A. In the short run, an open market sale would move the equilibrium to: O A. point E OB. point C O C. point H O D. point B 10