By using graphs, show and explain each of the following events as either leading to an increase or a decrease in the equilibrium interest rate? d)A sale of government securities by the TCMB f)An increase in the discount rate e)decrease in the level of aggregate output

What effects would each of the following have on aggregate demand or       aggregate supply?  Justify your answer. In each case use a diagram to show the expected effects on the equilibrium price level and real output level in the economy.  Assume that all other things remain constant and prices are inflexible downward.  (a) A reduction in interest rates at each price level   (b) A sizable increase in labor productivity.   (c) The nation’s currency appreciates against its major trading partners  .

Suppose that the White House decides to sharply reduce military spending without increasing government spending in other areas. a) Comment on the effect of this measure on aggregate demand. b) Show your answer graphically.

Suppose that the production function for the economy is given by: Y = AL/3K/3 Suppose that this economy has 1,000 units of Labour, and 125 units of capital, and TFP (A) is equal to 10. The Short-Run Aggregate Supply Curve (AS) here is given by: Y = 5p And when we consider the AEF at a price level of $1,400, the main components of it (C, I, & G) are given by (we are assuming a closed economy NX = 0): C = 300 + 0.8Y I = 300 G = 200 1. What is potential GDP in this question (Y*)? Show your work. Suppose also that for any $10 decrease in price, desired consumption will increase by $5. 2. Write down the equation for the Aggregate Demand Curve (AD) in the form of Y = a + bp. Show your work. 3. What is the current Short-Run Equilibrium value for Real GDP (Y) and the price level (p)? Show your work. 4. Draw the AD, AS, and LRAS curves. Label all x-intercepts and y-intercepts. Are we currently in an Inflationary Gap, Recessionary Gap, or in Long-Run Equilibrium? How do you know?

You will draw four separate Aggregate-Demand/Aggregate-Supply graphs.  Each graph will have one curve shift.  Be sure to label axis, curves, and equilibrium.  Change colors to show the shift and label the new equilibrium.  Draw an ADAS graph at equilibrium.  Suppose the interest rates on loans on capital goods decrease.  Which curve will shift? Draw the new equilibrium.  Draw an ADAS graph at equilibrium.  Suppose there is an decrease in government spending.  Which curve will shift? Draw the new equilibrium.  Draw an ADAS graph at equilibrium.  Suppose the income of our trading partners increase.  Which curve will shift? Draw the new equilibrium.  Draw an ADAS graph at equilibrium.  Suppose there is widespread concern that prices will continue to rise in the future.  Which curve will shift? Draw the new equilibrium.

Given the following circumstances, indicate whether or not the aggregate supply curve would shift and, if so, which way would it shift: The price of a barrel of oil doubles An advance in alternative energy technology significantly reduces its cost In order to maintain a relatively clean air quality, a carbon emissions tax is levied against firms with a carbon footprint As a result of fracking, the price of natural gas is significantly reduced Advances in technology increase the productivity of the American worker, on average, by 30%

The graph on the right represents initial output in the short run. Suppose real interest rates fall. Using the line drawing tool, draw a new line depicting the new aggregate demand. Label this line 'D₂'. Carefully follow the instructions above and only draw the required object. C Aggregate demand, D Output (real income), Y D=Y D₁

From the following information, calculate the equilibrium values of Income (Y), interest rate (i) investment (I), net exports (NX), and money demand (md).

Consider a macro-economy that was initially at equilibrium. Using an aggregate demand and aggregate supply diagram model of the economy, graphically illustrate and discuss the short-run and long-run effectsof the following events upon the economy:(a) The imposition of a carbon tax upon local big polluting companies;(b) An appreciation in the foreign exchange rate value of the economy’s currency;(c) A major trading partner’s economy fall into recession;(d) The country’s main exports fall in price while the goods the country imports from abroad rise in price

Suppose that a consulting firm has generated the following information about the economy of H: (i) the current employment in export industries is 50,000; (ii) the current total employment in the city is 150,000; (iii) export employment is expected to grow by 10,000 jobs.  a. Is there enough information to predict the effect of the increase in export employment on total employment?  b. If you have enough information, what is the effect?  c. If there is insufficient information, proceed with the analysis as far as you can and list the additional information you need to complete the analysis.