Using the “dynamic aggregate demand” and “dynamic aggregate supply” (DAD/DAS) model: draw a graph and discuss the effect of an adverse supply shock, such as a rise in oil prices. (Your answer
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Using the “dynamic aggregate demand” and “dynamic
draw a graph and discuss the effect of an adverse supply shock, such as a rise in oil prices.
(Your answer should be 150 words ±10%)
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- Russia’s invasion of Ukraine is causing energy prices to soar in the euro area (at an annual rate of 39% according to the Economist, June 2022). (1.a) What kind of economic shock is this for the euro area (AD or AS; positive or negative)? Use the AD/AS model to predict the effects of this shock on euro area output, prices, employment, and unemployment. Does it matter whether the shock is permanent or temporary? How must fiscal policy respond if the government’s target is price stability? How will this policy change your answer about prices, employment, and unemployment? Include the AD/AS grapUsing the “dynamic aggregate demand” and “dynamic aggregate supply” (DAD/DAS) model: (b) draw a graph and discuss the effect of an adverse supply shock, such as a rise in oil prices.How would you draw an ADAS diagram showing an event that caused the aggregate demand to shift?( my example is how the federal government increased spending on national defense) Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- Which of the following events would not involve a supply shock that would shift the aggregate supply curve? (i) The Cosatu union disintegrates and the minimum wage is abolished. (ii) African bank plc’s bad debt creates a financial crisis and that leads to reduction in money supply. (iii) 2016 drought destroys half of the crops farmed. (iv) A tax on sugar is levied on companies that produce sugary beverages. Group of answer choices Only ii and iv are correct. Only ii is correct. Only iii and iv are correct. Only i and ii are correct.Given the Aggregate demand function of US AD= 5000 + 0.7Yd. Interpret this equation and diagramatically express the equilibrium output.Using the “dynamic aggregate demand” and “dynamic aggregate supply” (DAD/DAS) model: (a) draw a graph and discuss the effect of a reduction in aggregate demand.
- 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…Suppose oil prices increase by 20% and as a result firms increase the prices of the goods and services they sell. This is an example of a supply shock. True FalsePlease draw four AD/AS diagrams (t-0,1,2,3) to show how the Covid-19 pandemic has affected our economy as economic shocks (without any government intervention) in short-run and long-run. Please show the adjustment process in one of your diagrams. Please write a short explanation for each diagram that you draw.
- Describe the economic effects of the current pandemic. How would it affect the Aggregate Demand and Aggregate Supply graph? What are some of the global aspects of the situation?Consider the effects of Corona virus pandemic on the macro economy in Kenya. Suppose we assume that the massive lockdown of the economy that followed the outbreak represents a large negative aggregate demand shock, use the aggregate demand-long-run aggregate supply-short-run aggregate supply (AD-LRAS-SRAS) model to show what happens to output, prices and unemployment. Thank youUsing a well-labelled diagram, explain what happens to Aggregate demand of a country like Kenya when the prices of petroleum products increases