Che Assume that an economy starts from long-run equilibrium, and then there is an increase a sharp increase in oil prices, ceteris paribus. Where on the following graph would the economy be after this initial shock but before any self- adjustment? #1 Multiple Choice O O O LRAS SRAS1 SRAS (Y) (YP:13) (Yo: #2) AD ADO
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- Suppose the economy of the hypothetical country “X” is currently in equilibrium at point A on thegraph. There were two major shocks to the economy in 2020.First shock was related to oil prices; the other was related to consumer confidence about futurebusiness conditions. Oil Shock: The economy X faced a rise in the average price of oil along with the rise of world price ofoil.E) Would an increase in oil prices cause a demand shock or a supply shock? Redraw the diagram toillustrate the effect of this shock by shifting the appropriate curve. What happens to theAggregate output and price level after the shock? (3)F) If policymakers wish to prevent the equilibrium output from changing in response to the oilprice increase, should they use contractionary or expansionary fiscal policy? (Redraw the graphfrom part E and show the change) (4)G) Even if the economy moves back to original Aggregate output, will there be any drawback? (1)Consumer Confidence Index: The Consumer Confidence Index…Assume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on: aggregate demand, aggregate supply, price level, real GDP.(a) A decrease in government expenditure in infrastructure(b) A severe recession occurs in a country which has been a major importer of thenation’s exports.(c) The federal government increases business taxes with diagram7. We ran a Vector-autoregresive model with two variables: with dtrade (change in trade balance), doilpr (change in oilpr) with one-lag and the result is as follows: dtrade 1st Lag of Trade Balance 1st Lag of Oil Price doilpr 1st Lag of Trade Balance 1st Lag of Oil Price Coef 0.48 275 0.04 1291 0.02 2939 0.35 7591 Std. Err 0.04 2789 0.02 1304 0.09 2198 0.04 5904 Z- statistic 11. 28 1.9 4 0.2 5 7.7 9 P>| zl 0 0.0 53 0.8 04 0 a) What can you infer from the result? b) Can you say anything about the long-run equilibrium value for change in trade- balance given the result?
- Assume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on:1. aggregate demand, 2. aggregate supply, 3. price level, and 4. real GDP. (a) An increase in government expenditure in infrastructureClick or tap here to enter text.(b) A severe recession occurs in a country, which has been a major importer of thenation’s exports.Click or tap here to enter text.(c) The federal government increases business taxesClick or tap here to enter text.(d) The Central Bank increases the cash interest rateWhat is the role of daynamic in macroeconomic? What are the diffrence between static and daynamic?What sort of shock describes the economic events materialising in the global omy from mid-late 2008? econ-
- Assume that the housing market is in equilibrium in year 1. In year 2, the mortgage rate that banks charge consumers decreases, but producers are not affected. Also in year 2, the cost of lumber used to build homes increases. Which of the following is most likely to be the equilibrium change? Price S 8 E C D 0 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a The equilibrium will be at point C before the change in expectations and point B after the change b The equilibrium will be at point A before the change in expectations and point B after the change с The equilibrium will be at point A before the change in expectations and point E after the change d The equilibrium will be at point E before the change in expectations and point C after the change la Quantity37.6% R Give Up? O Hint ment Score: Resources Chec on 5 of 15 <. In 2013, Prussia's aggregate demand curve was determined by the equation M +0= 4%. A change in aggregate demand means that in 2014, Prussia's aggregate demand curve was determined by the equation M +6= 7%. Using this information, draw Prussia's old and new dynamic aggregate demand curves on the graph. Which of the factors could have resulted in the change in 14 aggregate demand seen between 2013 and 2014? 13 O an improvement in technology 12 11 an increase in imports 10 a decrease in oil prices 8. AD 2013 O higher consumer confidence 7. 5. -3 -2 -1 3. 6. 10 Real GDP growth rate F12 AD 2014 4. 6, 4. Inflation rateFor macroeconomic
- What kind of economic changes in the economy would lead the curve tobe more steeply sloped?What are the factors other than price that can shift aggregate demand curve interms of investment and consumption? Also explain graphically.Sub : EconomicsPls answer very fast.I ll upvote. Thank You 3)- Consider if in a given economy, the parliament approves an increase in minimum wage. Starting from the medium run equilibrium, when economy is at full employment to discuss the effects of this shock. a)- Using a set of WS/PS curves, and only in labor market, in step by step way, explain the impacts. b)- Using the aggregate supply and demand (AS/AD), and IS/LM curves, show the short and medium run equilibrium points. [No explanation, only neat and well-marked graphs are acceptable]
