Now assume that the contraction in the Singaporean economy is mainly driven by supply side factors, Show the short-run effects of this using the AD-AS model. Carefully explain in words
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Now assume that the contraction in the Singaporean economy is mainly driven by supply side factors, Show the short-run effects of this using the AD-AS model. Carefully explain in words
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- Now assume that the contraction in the Singaporean economy is mainly driven by supply side factors, Show the short-run effects of this using the AD-AS model. Carefully explain in words (100 or less).Use the basic AD-AS model to illustrate and describe the effect of unexpected increase in the oil prices on macroeconomic equilibrium output, price level and (un)employment in short-run. Additionally, also explain graphically, how the economy adjusts back to long-run equilibrium.Use the AS-AD model to analyze the impact on the U.S. economy as a result of each of the listed events. Mention if AD and/or AS shift and in which direction. Also explain what the country will experience with respect to increase or decrease in short-run equilibrium real GDP and increase or decrease in the equilibrium price level. For each event, assume that the economy is originally in a full- employment equilibrium, mention if in the new equilibrium there is a recessionary gap or an inflationary gap. A) Congress raises income taxes. B) The Federal Reserve decreases the target for the federal funds rate. C) Migration to the US increases the working- age population. DJ Appreciation in the international value of the dollar.
- Assume that an economy is initially operating at the natural rate of output (full employmentoutput). Use the AD-AS model to illustrate graphically the effects on price and output of areduction in government spending. Explain your assumptions with respect to the range ofaggregate supply of your analysis.Graphically show the likely short-run impact on US real GDP and aggregate price level using the AD/AS model. Explain your prediction. Which curve in the AD/AS model would a change in US consumer consumption affect? Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.Suppose Chino is a closed economy. A large portion of the work force has joint astrong labor union. As such, the nominal wages of most workers are downwardrigid.Suppose most households lose their wealth in a recent clash of the stock market.How would the price and output level of Chino be affected in the short run?Explain by using the AD-AS model. Particularly, use the sticky-wage model ofaggregate supply to explain the magnitude of the effects on price and output.
- Suppose, initially the Australian economy is at full employment (in other words the economyis at the potential GDP). Using AD-AS model, explain how would each of the following eventsaffect the economy both in the immediate and in the long term.a) A slowdown in China’s economic growth due to the sub-prime crisis in the USDraw and fully label an AD-AS model. Describe the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve in words. Why is one of these curves horizontal and the other vertical?Figure 16-1 Price level A) E to A. B) C to D. C) A to E. D) C to B. E) D to C. A Save LRAS D B E Real GDP Refer to Figure 16-1. Suppose the economy is in short-run equilibrium above potential GDP and no policy is pursued. Using the static AD-AS model in the figure above, this would be depicted as a movement from U SRAS AD 3 AD₂ AD₁
- Use the AD-AS model in the figure below to answer the following questions. Price level LRAS AS * AD, AD₂ AD₁ Real GDP Suppose this economy is operating at point B, if there is an increase in the price of inputs, then in the short and in the long run. . . . run a) real GDP falls and the price level rises; real GDP is below its original level with a higher price level b) real GDP rises and the price level falls; real GDP and the price level return to their original levels c) real GDP and the price level both rise; real GDP is above its original level with a higher price level d) real GDP falls and the price level rises; real GDP is at its original level as a result of the factor price adjustment process e) real GDP and the price level both rise; real GDP returns to its original level with a higher price levelAssume that an economy is initially operating at the natural rate of output (full employmentoutput). Use the AD-AS model to illustrate graphically the effects on price and output of anincrease in government spending. Explain your assumptions with respect to the range ofaggregate supply of your analysis.Draw an AD/AS model in purely competitive long run initial equilibrium. Label the price level P*=100 and YF=10. Label the SRAS1 and the AD1 curve. Label the LRAS1 curve. Be sure to also label both axis correctly.] Draw a graph of the "business cycle." Show the long run growth trend line (put a trend percentage the "makes sense") and the cyclical curve around that trend line. Be sure to also label both axis correctly. Label point A on both graphs in #1 and #2 above. Then on graph in #1, indicate the full employment level (i.e., the "usual" unemployment rate in LR initial equilibrium) at point A for YF* (at full potential output) in initial equilibrium. Assume an Increase in AD for any reason (increase in Aggregate Demand) and show it on graph #1 above. Then, Label point B on all applicable graphs above (after the increase in AD), at the intersection of the new equilibrium. -is point B a Short run or Long run equilibrium point? -Indicate the new unemployment rate at Point B that makes…