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Assume the Pakistan’s economy is in recession: Pakistan implements a combination of expansionary fiscal and
- Aggregate demand in Pakistan
- The price level in Pakistan
- Interest rates in Pakistan
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- Explain/discuss how an exogenous increase of Mexico’s GDP will influence U.S. aggregate demand and GDP.Suppose, after five years of sluggish growth, the European Unions economy picks up speed. What would be the likely impact on the U.S. trade balance, GDP, and employment?What are some of the ways in which exports and imports can affect the AD/AS model?
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- What is the most likely impact to the US economy of Europe entering a recession? Question 11Answer a. There is a positive shock to US aggregate demand. b. There is a negative shock to US aggregate demand. c. The quantity of real GDP demanded in the United States increases. d. The quantity of real GDP demanded in the United States decreases.Please Define Aggregate supply in no more than 3 linesWhat are the main factors that created a sitaution of Stagflation in the 1970s within the US.
- q. Consider the following scenarios and briefly explain how each scenario would affect price level and real GDP in Canada. Canada’s major trading partners experience severe recession. Canadian dollar depreciates in the foreign exchange market. Major technological breakthroughs lead to significant increase in productivity.In the foreign exchange market, value of the dollar has fallen. Simultaneously, businesses are feeling hesitant to undertake new real investment (“animal spirits” are down) and households are nervous about the future (Consumer Confidence Index is down) and are cutting back on consumption while they save more. What happens to the Aggregate Demand and Aggregate Supply curves of the U.S.? 1. Aggregate Supply does not change. AD has two opposing effects: exports rise due to the fall in the dollar, and both investment and consumption fall. It is not clear which effect is stronger. AD can move either to the left or to the right. 2.Aggregate Supply does not change. AD has two effects on it. Exports fall due to the fall in the dollar, and both investment and consumption also fall. AE falls and AD shifts to the left. 3.Aggregate Supply does not change. AD has two effects on it. Exports rise due to the fall in the dollar, and both investment and consumption also fall. AE falls and…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 AD1 110 100 90 300 400 500 600 700 800 100 200 OUTPUT (Billions of dollars) PRICE LEVEL