Please reproduce the figure. I need a graph drawn for each question. Figure 1.3-Keynesian Model of an economy operating below its level of potential outputPriceLevelAggregate SupplyP1-Aggregate DemandcurrentpotentialOutputlevel oflevel ofoutputoutput4A. Reproduce Figure 1.3 from Module 1-The Keynesian Model of an economy below its level of potential output.Label the aggregate demand curve "AD, 21" (signifying aggregate demand in the second quarter of 2021)and set outeconomic output on the horizontal axis as Y21.5. In 2019, the unemployment rate was 4.5% and capital utilization rate was 75%. Without adjusting potential GDP,return to Figure 1.3 drawn in 4A and insert an aggregate demand curve that represents aggregate demand as of 2019,labeling the curve "AD, 19" (signifying aggregate demand in 2019) and set out economic output on the horizontal axisas Y19.

In macroeconomics, economic fluctuations are generally studied using the concepts of aggregate…

Answered: Figure 1.3-Keynesian Model of an…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter22: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 12P

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1 Fully develop (mathematically and graphically) the Keynesian Cross (Expenditures=Output) model. Be explicit regarding what variables are endogenous and what variables are exogenous.
Suppose Congress decides to reduce the budget deficit by cutting government spending. a. Use the Keynesian-cross model to illustrate graphically the impact of a reduction ingovernment purchases on the equilibrium level of income. Be sure to label: i) the axes;ii) the curves; iii) the initial equilibrium values; iv) the direction the curve shifts; andv) the terminal equilibrium values. b. Explain what happens to equilibrium income as a result of the cut in governmentspending.
Theshortrunaggregatesupplycurvewasconstructedassumingthatasthepriceofoutputsincreases,thepriceof inputs stays the same. How would an increase in the prices of important inputs, like energy, affect aggregate supply?
If the economy is operating in the neoclassical zone of the SRAS curve and aggregate demand falls, what is likely to happen to teal GDP?
A neoclassical economist and a Keynesian economist are studying the economy of Vineland. It appeals that Vineland is beginning to experience a mild recession with a decrease in aggregate demand. Which of these two economists would likely advocate that the government of Vineland take active measures to reverse this decline in aggregate demand? Why?
In the AD/AS model, what prevents the economy from achieving equilibrium at potential output?
6.1.What is an AD-AS model and what does such a model as per the givendiagram essentially focus on?6.2.Discuss the diagram in detail by first explaining what leads to step Step 1(representing a shift in curves on the diagram) and indicating what occursto cause shifts in some of the curves. Then discuss Step 2 (whichrepresents other macroeconomic changes) and indicate what happens toother variables when there are shifts in some of the curves as per Step 1. 6.3.What, in general, do the points of intersection between the AS and AS2curves and the AD curve show?6.4.When the LAS curve moves to the right to LRAS2, what exactly do thepoints of intersection between the AS and AS curves and the AD1 curve,indicated as point 1 and point 2, reflect on the diagram?
Look at Figure 2. Assume this aggregate demand diagram represents an economy with government, where: a = exogenous consumption b = the marginal propensity to consume t = the tax rate |= investment G = government spending Y = income Figure 2 Aggregate demand AD, AD. 45° Income What is the equation for the aggregate demand schedule ADo? Select one: O ADO = b+ a(1 - t)G +1+ Y O ADO = a + b(1 – 1)Y + 1+ G O ADO = a + b(1 - t) I+ Y+ G O ADO = b+ a(1 – 1)Y + /+ G Next page > ( Previous page PHILIPS
For each of the three theories for the upward slopeof the short-run aggregate-supply curve, e<~rcfullyexplain the following:tl. how the economy recovers from a recession andreturns to its long-run equilibrium without anypoUcy inrerventionb. what determines the speed of that recovery
1. When the federal government engages in COVID-19 fiscal stimulus such as the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the American Rescue Plan Act this will affect the AD-AS model by: Group of answer choices a. Decreasing aggregate demand (AD). b. Increasing aggregate demand (AD). c. Decreasing aggregate supply (AS). d. Increasing aggregate supply (AS).

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