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- Suppose that an economy wants to boost available labor hours in order to increase aggregate supply. What is the best way to accomplish this?As you know, supply and demand shifts are caused by one of their determinants. Shifts in aggregate demand (AD) show the effect of events on price level and Real GDP. Any event that causes a change in consumer, business, or government spending or any change in net exports (C+l+G+Xn) will shift AD. Any event that causes a change in production costs or increases productivity will shift aggregate supply (AS). Decide if the following events are Micro, shifting supply or demand, or Macro, shifting AD or AS. Give the direction in which the graph shifts. Demand Situation Aggregate Supply Aggregate Demand Supply Sales of Atlanta Braves gear grows with the success of the team. 1. The President and Congress pass a trillion dollar stimulus bill to provide aid during recession. 2. 3. Salmonella outbreak in peanut processing plants threatens lunches for school children. 4. Pomegranates are shown to be cancer fighting superfoods. Value of U.S. dollars declines, exports increase. 5. Global oil prices…An increase in oil prices will shift the aggregate
- True or False? Looking along the aggregate demand curve, deflation will lead to a lower level of GDP.What kind of change would happen to aggregate demand, aggregate supply, and real GDP. if foreign countries purchase an unusually large number of U. S. manufactured passenger and military airplanes.The consequences of climate change on the economy is a popular topic in the media. Suppose that a series of wildfires destroys crops in the western states at the same time a hurricane destroys refineries on the Gulf Coast. a) Using aggregate demand and supply analysis, explain how output and the inflation rate would be affected in the short and long runs. b) Show your answer graphically.
- An increase in the price level causes the aggregate supply curve to shift to another supply schedule. True or FalseWhen does macroeconomic equilibrium occur? Multiple Choice When exports equal imports. When the aggregate supply equals the long-run Aggregate Supply When the aggregate demand equals the long-run Aggregate Supply. When the aggregate quantity demanded is equal to the aggregate quantity supplied.What change does recession has on the price and output level when the change in aggregate demand is more than change in aggregate supply ?
- Now suppose history had taken an alternative turn following the Great Depression. Suppose President Roosevelt's government had not launched the "New Deal" to help the economy or WW2 had not happened. How would the American economy return back to its initial equilibrium? Explain in words and using an aggregate demand and supply plot.How an exogenous increase of Mexico’s GDP will influence U.S. aggregate demand and GDP.If the economy experiences inflation and economic growth, this means that aggregate demand grows by more than aggregate supply. True or False