Derive AD curve using Y=AE and show the shifts of AD curve.

Q: Graphically explain recessionary and inflationary gaps using AD and AS curves.

A: The below graph slows the recessionary gap and inflationary gap:

Q: What do the IS curve and the LM curve represent? What is the reason for their respective shape and…

A: The IS-LM model is a method for making sense of and distils the financial thoughts set forth by John…

Q: what is The Aggregate Expenditure Model

A: The value of all finished goods and services in an economy at a particular period is known as…

Q: How changes in government expenditure and tax programs through the setting of the government's…

A: Gross domestic product is the final combination of goods and services in a country. GDP is an…

Q: Define the LM curve and explain how the LM-curve is derived. Use graphs to illustrate your answer

A: The LM curve shows various combinations of interest rates and levels of output or income such that…

Q: Clearly explain the derivation of the LM curve.distinguish between the traditional, positive-sloping…

A: The LM curve defines the sum of all income levels (GDP) and interest rates at which money supply…

Q: the short-run effect of the shift in the reaction function on GDP?

A: The reaction-function of the central-bank is the function showing how the central-bank changes the…

Q: Draw the graph of the GG and LL schedules and explain the logic behind the slopes of each of the…

A: GG and LL schedules represent the degree of economic integration between countries in a fixed…

Q: With the  AD-AS graph, what variable is on the vertical axes?

A: The AD( Aggregate Demand) and AS(AS) model is the one that represents the national income along with…

Q: 1479 1770 1047 1040 1040 O True O False YEAR Source: "Current-delar and Real GDR Bureau of Economics…

A: The graphical representation highlights the business cycle of the US economy running between 1947 to…

Q: When consumers’ expected income decreases, this leads to ​A. Positive shift (increase) in AD ​B.…

A: Expected income of consumers and aggregate demand AD have positive relationship.

Q: Draw the equilibrium in IS-LM-BP curve.

A: IS-LM: The IS-LM is a macroeconomic model which is used to represent how the money and product…

Q: Consider just the AD curve. Suppose consumption (C) broadly increases across the entire economy.…

A: The demand comes from all the economic agents such as the households, firms, and the government is…

Q: Suppose that there is an economy with the AD and AS functions below: AD: P = 2500 - 2Y SRAS: P = 300…

A:

Q: Explain with diagram the slope of the IS curve in economy of a country

A: According to the given question The IS curve stand for investment saving curve which is basically…

Q: SUSAN: The professor used the aggregate demand and aggregate supply model to show that in spending…

A: A market is a place where the buyers and sellers interact with each other and the exchange of goods…

Q: Show shifts in AD using LM curve.

A: AD curve shows the inverse relation between the price level (aggregate) and the national income

Q: Use an IS curve and an MP curve to derive graphicallythe AD curve

A: The IS curve expresses the equilibrium in the goods market. It is a negatively sloped curve that…

Q: ic equilibirum ca

A: Derivation of IS curve : In panel (a) of the diagram, the relationship between planned investment…

Q: Which of the following statements is true based on this graph?

A: Long run aggregate supply (LRAS) curve depicts the potential level of output of the economy.  The…

Q: Name and discuss the factors that shift the LM Curve. Give 2 examples with the aid of a diagram of…

A: The LM curve i.e. " Liquidity Preference-Money Supply" shows all the levels of income and interest…

Q: Explain the Equilibrium condition of Aggregate Expenditure= output Y. How are inventory changes…

A: AE = Y = C + I + G +X - M where,  AE - Aggregate Expenditure Y - Output C - Consumption I -…

Q: Name and discuss the factors that shift the LM Curve. Give 2 examples with th diagram of LM curve…

A: The money supply is the aggrgate amount of money available in the economy at a specific time. The…

Q: Suppose the economy begins with output equal to its natural level. Then there is an increase in the…

A: Let's examine the simultaneous effects of an increase in the supply of money and a raising of taxes…

Q: Question 8 Two other events that would shift AD to the right are Question 9 and

A: Aggregate demand, on the other hand, calculates the entire dollar worth of the market for every…

Q: Which of the following will NOT cause a shift of the AS curve? Changes in non-labour O Changes in…

A: Aggregate supply is the total supply of goods and services in an economy while aggregate demand is…

Q: Give an example of an event which can be depicted by the following AD- AS graph. Price level LRAS

A: The equilibrium occurs where the demand and supply forces are equal. The change in demand leads to…

Q: Describe the differences between recessionary and inflanationary gaps.

A: There are two types of gaps in the economy: 1. Inflationary gap 2. Recessionary/Deflationary gap…

Q: Differentiate between an induced increase in consumption and in autonomous increase in consumption…

A: Autonomous consumption is the level of consumption without income. On the other hand, Induced…

Q: Explain the slope of the SR aggregate supply schedule. Explain how the SR aggregate supply schedule…

A: Short-run aggregate supply (SRAS) is a graphical model that shows the positive connection between…

Q: What occurs as the economy moves leftward along the a given IS curve

A: Meaning of IS-LM Curve: The term IS-LM curve refers to the combination between market goods and…

Q: Question 16 Stagflation most likely results from A) a decrease in both AD and AS. B) Increasing AD…

A: Stagflation refers to the situation when price level is increasing and output is decreasing. It…

Q: What is the relationship between real business cycle models and DSGE models?

A: Real business cycle model refers to a macroeconomic model which says that economic changes or…