7) During the recession of 2007-2009, the U.S. economy was experiencing a decrease in home prices and consumer wealth, a credit crisis in the financial markets, and declining consumer and business confidence. What components of aggregate demand were affected and what was the impact on real output? What were the policy options?

None

part d

39 Which of the following will cause a shift in the short-run aggregate supply curve? a.An increase in government spending b.A change in expected inflation c.Unanticipated inflation d.A change in investment e.A decrease in government spending

1. In the following table, determine how each event likely effects potential output (a.k.a., long-run aggregate supply).    Direction of Potential Output Shift Event Left Right No Shift The government allows more immigration of working-age adults.       For environmental and safety reasons, the government requires that the country’s nuclear power plants be permanently shut down.       An investment tax credit increases the rate at which firms acquire machinery and equipment.         2. In the following table, determine how each event affects the position of the aggregate demand curve.    Direction of AD Curve Shift Event Left Right No Shift A decrease in consumer confidence (suggests people believe a contraction/recession coming)       A decrease in individual income tax rates       An increase in the value/price of housing         3. What effect would an increase in aggregate demand…

A) Discuss, with examples, factors or events that might shift the short run aggregate supply curve. B) Imagine an economy is in long run equilibrium. Now suppose that firms experience an increase in their cost of production (say, due to a natural disaster). i. Explain, with graphs, the macroeconomic impact of such an increase in production costs. ii. Describe how policymakers could use fiscal policy to counteract the effects of increased cost of production.

Question 15

QUESTION 4 Chapter 14 Suppose economy is in long run equilibrium. [Only one diagram is required for this question, draw and label clearly to show all relevant points and moves, if more than one diagrams are drawn for this question, I will give a zero grade for this question] a. Use the model of aggregate demand and aggregate supply to illustrate the initial equilibrium (call it point A). Be sure to include both-short run and long-run aggregate supply. b. The central bank raises the money supply by 10%. Use the diagram you drew in part a) to show what happens to output and price level as the economy moves from initial equilibrium A to the new short-run equilibrium (call it point B). Explain all the details about the changes that happen due to increase in money supply and how these changes affect the model. c. Show how economy moves from the short run equilibrium (point B) to the new long- run equilibrium (call it C) and explain why it moves to C. d. According to sticky wage theory of…

Confused and not sure how to answer

How did the large decrease in aggregate demand during the first and second quarters of 2020 (the Coronavirus demand shock) affect real GDP and the price level? Explain how and why the spread of the Coronavirus made an impact on consumer and business investment spending as well as overall aggregate demand? Be specific.