What is the new GDP in the short-run as a result of this shift? What is the new price level in the short-run as a result of this shift? What is the price level in the new long-run equilibrium as a result of this shift? What is GDP in the new long-run equilibrium as a result of the shift?
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What is the price level in the new long-run equilibrium as a result of this shift?
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- The following graph shows an increase in aggregate demand (AD) in a hypothetical country. Specifically, aggregate demand shifts to the right from AD1 to AD2, causing the quantity of output demanded to rise at all price levels. For example, at a price level of 140, output is now $400 billion, where previously it was $300 billion. 170 160 150 140 - 130 AD2 120 110 AD, 100 90 100 200 300 400 500 600 700 800 OUTPUT (Billions of dollars) The following table lists several determinants of aggregate demand. Complete the table by indicating the change in each determinant necessary to increase aggregate demand. Change Needed to Increase AD Wealth Taxes Interest rates The value of the domestic currency relative to the foreign currency PRICE LEVELThe graph below shows the AD-AS diagram for Spain. Suppose that the economy is initially in long-run equilibrium with the price level of 900. Now suppose that the Aggregate Demand (AD) curve shifts left from AD1 (blue) to AD2 (green). 1200 AD 1100 1000 Price Level ADS 900- 800 79R ST 600* 500 400 300 200- 100- LRAS 100 200 300 400 500 600 700 800 900 1000 1100 120 Real GDP Q 1. What is the new GDP in the short-run as a result of this shift? I 2. What is the new price level in the short-run as a result of this shift? 3. What is the price new long-run equilibrium as a result of this shift? 4. What is GDP in the new long-run equilibrium as a result of this shift? 5. What causes the economy to move from the short-run equilibrium to the new long-run equilibrium? O Decreased wages. O increased wages. O Increased prices. O Decreased prices.The table below shows information on aggregate supply, aggregate demand and the price level for the imaginary country of Xurbia. Price Level AD AS 110 700 600 120 690 640 130 680 680 140 670 720 150 660 740 160 650 760 170 640 770 Plot the AD/AS diagram from the data shown (Don't have to show graph but do draw it to help you answer the questions). a. Identify the equilibrium. b. Imagine that as a result of a government tax cut, aggregate demand becomes higher by 50 at every price level. Identify the new equilibrium. c. How will the new equilibrium alter output? How will it alter the price level? What do you think will happen to employment?
- The following graph shows a decrease in aggregate demand (AD) in a hypothetical country. Specifically, aggregate demand shifts to the left from AD1AD1 to AD2AD2, causing the quantity of output demanded to fall at all price levels. For example, at a price level of 140, output is now $200 billion, where previously it was $300 billion. The following table lists several determinants of aggregate demand. Complete the table by indicating the change in each determinant necessary to decrease aggregate demand. Change needed to decrease AD Wealth (increase/ decrease) Taxes (increase/ decrease) Expected rate of return on investment (increase/ decrease) Incomes in other countries (increase/ decrease)Suppose firms are optimistic about the outlook of the economy and they decide to increase investment. Also suppose that, simultaneously, there is a reduction in business taxes. Use the AD-AS graph to show what happens to the price level and output as a result.Question 47 The graph below shows the AD-AS diagram for Brazil. Suppose that the economy is initially in long-run equilibrium with the price level of 800. Now suppose that the Aggregate Demand (AD) curve shifts left from AD1 (blue) to AD2 (green). 1200 ADX 1100- 1000 Price Level ADR 900- 800 700 600 500RASI 400* 300 200- 100- < 100 LRAS 200 300 400 500 600 700 800 900 1000 1100 120 Real GDP What is the price level in the new long-run equilibrium as a result of this shift?
- Beginning in March 2013, federal government spending was resstrained due to the sequester (feel free to Google details). Moreover, then President Obama’s budget proposals called for cuts in various types of government spending over the next ten years. Use the AD-AS model (along with a labor market graph) to show and explain how this will affect Y, N, W/P, and P over time. As an aside, recent news reports have suggested that the possibility of a renewed use of the sequester is part of the current political maneuvering over the federal budget for the fiscal year that starts October 1st.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 levelReview the problem shown in the Work It Out titled "Interpreting the AD/AS Model." Like the information provided in that feature, Table 24.2 shows information on aggregate supply, aggregate demand, and the price level for the imaginary country of Xurbia. Price Level AD AS 110 700 600 120 690 640 130 680 680 140 670 720 150 660 740 160 650 760 170 640 770 Table24.2 Price Level: AD/AS Plot the AD/AS diagram from the data shown. Identify the equilibrium. Imagine that, as a result of a government tax cut, aggregate demand becomes higher by 50 at every price level. Identify the new equilibrium. How will the new equilibrium alter output? How will it alter the price level? What do you think will happen to employment?
- On the following graph, use the purple Mine (diamond symbol) plot this economy's long-run aggregate supply (LRAS) curve. Then use the orange ne segments (square symbol) to plat the economy's shart-run aggregate supply (AS) curve at each of the following price levels: 100, 105, 110, 115, and 120, PRICE LEVEL 116 110 105 100 80 75 0 + 10 20 30 40 90 70 OUTPUT (ons of dollars) 85 120 AS LRAS The short-run quantity of output supplied by firms will fall short of the natural level of output when the actual price level level that people expected. the priceThe following graph shows the short-run and long-run aggregate supply curves (SRAS and LRAS) for an economy. Suppose there is a technological improvement that allows firms to reduce their costs of production permanently. Drag one or both of the curves on the graph to illustrate the long-term effects of this change. If you don't believe there will be any long-term effects, leave the curves where they are. 240 LRAS SRAS 200 SRAS 160 LRAS 120 80 40 6 12 18 24 REAL GDP (Trillions of dollars) Assuming aggregate demand is not affected by the technological improvement, the long-run effect of this v supply shock is v in aggregate output and v in the price level. PRICE LEVELGraphically 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.