a. What increase in aggregate demand is necessary to achieve this?$15 billions.b. If successful, what will be the growth rate? Round your answer below to 2 decimal places.%c. If successful, what will be the inflation rate? Round your answer below to 2 decimal places.8.33% The economy of Carlsberg is presently in equilibrium, but is suffering a recession as depicted in the graph below. The central bank ofCarlsberg is introducing an expansionary monetary policy to get the economy back to the full-employment level of real GDP.Price index1601401201008060380390 400 410 420Real GDP (in billions)430440ASADLAS

Aggregate demand refers to the total demand for commodities and services made by all the economic…

a. What increase in aggregate demand is necessary to achieve this? $ 15 billions. b. If successful, what will be the growth rate? Round your answer below to 2 decimal places. % c. If successful, what will be the inflation rate? Round your answer below to 2 decimal places. 8.33 %

a. What increase in aggregate demand is necessary to achieve this? $ 15 billions. b. If successful, what will be the growth rate? Round your answer below to 2 decimal places. % c. If successful, what will be the inflation rate? Round your answer below to 2 decimal places. 8.33 %

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

a. What increase in aggregate demand is necessary to achieve this?
$
15 billions.
b. If successful, what will be the growth rate? Round your answer below to 2 decimal places.
%
c. If successful, what will be the inflation rate? Round your answer below to 2 decimal places.
8.33
%

The economy of Carlsberg is presently in equilibrium, but is suffering a recession as depicted in the graph below. The central bank of
Carlsberg is introducing an expansionary monetary policy to get the economy back to the full-employment level of real GDP.
Price index
160
140
120
100
80
60
380
390 400 410 420
Real GDP (in billions)
430
440
AS
AD
LAS

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Step 1: AD-AS equilibrium:

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Step 2: Increase in AD:

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Step 3: Growth rate of the economy:

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Step 4: Inflation rate of the economy:

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