Aggregate Demand and Aggregate Supply Method 1) Starting Position will be given 2) Shock Demand or Supply 3) Positive or Negative Shift of Demand or Supply 4) Ouput gap i it recessionary or inflationary 5) Demonstrate and explain effects of initial shock on GDP and Price level www.w 6) In the long run, without policy Demonstrate and explain the market response and why. what will happen to GDP and Price Level 1. Assume the economy is in a recession with below average price level. If consumers think the economy will get worse and they decrease spending what will happen in the short and long run. 2. If the economy is in an inflationary gap period with below average price level, what happens in the short and long run if the government increases regulation on the energy sector. 3. If the economy is in a period of stagflation, what happens if the government increases taxes in the long run and short run?

You have 5 kids and work 2 jobs to help support your family. You work a day job from 8:00 am to 4:00 pm Monday through Friday.  You also cut hair at one of the local barber shops on Saturdays and Sundays.  On Saturdays you normally work from 7:00 am to 7:00 pm and make pretty good money because the shop is always full on the weekends.  Your wife is concerned that you are not spending enough time with the children because you work all of the time.  Using production possibilities analysis, show a situation where you decide to increase the amount of time on Saturdays that you hang out with the kids from 2 to 5 hours.

Could you please answer questions d and e.

What are the various types of manufacturing costs?