In the year 2027, aggregate demand and aggregate supply in the imaginary country of Patagonia are represented by the curves AD2027 and AS on thefollowing graph. The price level is currently 102. The graph also shows two potential outcomes for 2028. The first possible aggregate demand curve isgiven by the curve labeled ADA curve, resulting in the outcome given by point A. The second possible aggregate demand curve is given by the curvelabeled ADB, resulting in the outcome given by point B.PRICE LEVEL1081071061051041031021011000AD 202724IBAS106 8OUTPUT (Trillions of dollars)AD B121416? Suppose the unemployment rate is 7% under one of these two outcomes and 5% under the other. Based on the previous graph, you wouldexpectto be associated with the lower unemployment rate (5%).If aggregate demand is low in 2028, and the economy is at outcome A, the inflation rate between 2027 and 2028 isBased on your answers to the previous questions, on the following graph use the purple point (diamond symbol) to plot the unemployment rate andinflation rate if the economy is at point A. Next, use the green point (triangle symbol) to plot the unemployment rate and inflation rate if the economy isat point B. (As you place these points, dashed drop lines will automatically extend to both axes.) Finally, use the black line (cross symbol) to draw theshort-run Phillips curve for this economy in 2028.Note: For graphing pruposes, round the inflation rate under each outcome to the nearest whole percent. For example, round 1.9% to 2.0%.Hint: Hover your cursor over each point after you plot it to make sure you have placed it on the exact coordinate you intended.INFLATION RATE (Percent)876100136UNEMPLOYMENT RATE (Percent)24578Outcome AOutcome BPhillips Curve(?Suppose that the government is considering enacting an expansionary policy in 2027 that would shift aggregate demand in 2028 from ADA to ADB. Thiswould cause athe short-run Phillips curve, resulting inin the inflation rate andin theunemployment rate.

Equilibrium in the goods market is achieved at the intersection of aggregate demand and aggregate…

In the year 2027, aggregate demand and aggregate supply in the imaginary country of Patagonia are represented by the curves AD2027 and AS on the following graph. The price level is currently 102. The graph also shows two potential outcomes for 2028. The first possible aggregate demand curve is given by the curve labeled ADA curve, resulting in the outcome given by point A. The second possible aggregate demand curve is given by the curve labeled ADB, resulting in the outcome given by point B. PRICE LEVEL 108 107 106 105 104 103 102 101 100 0 AD 2027 2 4 B I AS ADB AD A 8 10 OUTPUT (Trillions of dollars) 12 14 16 ?

In the year 2027, aggregate demand and aggregate supply in the imaginary country of Patagonia are represented by the curves AD2027 and AS on the following graph. The price level is currently 102. The graph also shows two potential outcomes for 2028. The first possible aggregate demand curve is given by the curve labeled ADA curve, resulting in the outcome given by point A. The second possible aggregate demand curve is given by the curve labeled ADB, resulting in the outcome given by point B. PRICE LEVEL 108 107 106 105 104 103 102 101 100 0 AD 2027 2 4 B I AS ADB AD A 8 10 OUTPUT (Trillions of dollars) 12 14 16 ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In the year 2020, aggregate demand and aggregate supply in the fictional country of Drooble are represented by the curves AD2020AD2020 and AS on the following graph. The price level is 102. The graph also shows two possible outcomes for 2021. The first potential aggregate demand curve is given by the ADAADA curve, resulting in the outcome illustrated by point A. The second potential aggregate demand curve is given by the ADBADB curve, resulting in the outcome illus- trated by point B. PRICE LEVEL 108 107 106 105 104 103 102 101 100 0 AD 2020 2 ■ 4 B AS 6 8 10 OUTPUT (Trillions of dollars) ADA ADB 12 14 16 ? Suppose the unemployment rate is 6% under one of these two outcomes and 5% under the other. Based on the previous graph, you would expect to be associated with the higher unemployment rate (6%). If aggregate demand is low in 2021, and the economy is at outcome A, the inflation rate between 2020 and 2021 is Based on your answers to the previous questions, on the following graph use…
The graph below is associated with a hypothetical country. Consider a decrease in aggregate demand (AD). Specifically, aggregate demand shifts to the left from AD to AD₂, causing the quantity of output demanded to fall at each price level. For instance, at a price level of 140, output is now $200 billion, where initially it was $300 billion. PRICE LEVEL 170 160 150 140 130 120 110 100 8 90 0 100 AD₁ AD₂ 200 300 400 500 600 OUTPUT (Billions of dollars): 700 800 ?
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consider a simple Macroeconomic Model With the following equations: C=500 + 0.9 YD I=650 G=1000 T=0.3Y X=700 IM= 0.23Y a) calculate equilibrium national level of income b) calculate the governments budget balance at the equilibrium national level of income c) calaculate the countrys trade balance d) calculate the mulitplier for this economy
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