Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. In the year 2020, aggregate demand and aggregate supply in the fictional country of Gizmet are represented by the curves AD2020and AS on the following graph. The price level is 102. The graph also shows two possible outcomes for 2021. The first potentialaggregate demand curve is given by the ADA curve, resulting in the outcome illustrated by point A. The second potential aggregatedemand curve is given by the ADB curve, resulting in the outcome illustrated by point B.PRICE LEVEL108107106105104103102101ADBAS2020AD100024 6 810OUTPUT (Trillions of dollars)ADB121416Suppose the unemployment rate is 6% under one of these two outcomes and 5% under the other. Based on the previous graph, youwould expectto be associated with the lower unemployment rate (5%).If aggregate demand is low in 2021, and the economy is at outcome A, the inflation rate between 2020 and 2021 is INFLATION RATE (Percent)rate and1Based on your answers to the previous questions, on the following graph use the purple point (diamond symbol) to plot theunemployment rate and inflation rate if the economy is at point A. Next, use the green point (triangle symbol) to plot theunemployment rate and inflation rate if the economy is at point B. (As you place these points, dashed drop lines will automaticallyextend to both axes.) Finally, use the black line (cross symbol) to draw the short-run Phillips curve for this economy in 2021.Note: For graphing pruposes, round the inflation rate under each outcome to the nearest whole percent. For example, round 1.9% to2.0%.Hint: Hover your cursor over each point after you plot it to make sure you have placed it on the exact coordinate you intended.67001234567UNEMPLOYMENT RATE (Percent)Outcome A►Outcome BPhillips CurveSuppose that the government is considering enacting an expansionary policy in 2020 that would shift aggregate demand in 2021from ADA to ADB. This would cause athe short-run Phillips curve, resulting inin the inflationin the unemployment rate.

Phillips Curve depicts a trade-off between unemployment and inflation, indicating that policymakers…

In the year 2020, aggregate demand and aggregate supply in the fictional country of Gizmet are represented by the curves AD2020 and AS on the following graph. The price level is 102. The graph also shows two possible outcomes for 2021. The first potential aggregate demand curve is given by the ADA curve, resulting in the outcome illustrated by point A. The second potential aggregate demand curve is given by the ADB curve, resulting in the outcome illustrated by point B. PRICE LEVEL 108 107 106 105 104 103 AD2020 102 11 101 AS AD, ADB 100 00 0 2 4 10 OUTPUT (Trillions of dollars) 12 14 10 Suppose the unemployment rate is 6% under one of these two outcomes and 5% under the other. Based on the previous graph, you would expect to be associated with the lower unemployment rate (5%). If aggregate demand is low in 2021, and the economy is at outcome A, the inflation rate between 2020 and 2021 is

In the year 2020, aggregate demand and aggregate supply in the fictional country of Gizmet are represented by the curves AD2020 and AS on the following graph. The price level is 102. The graph also shows two possible outcomes for 2021. The first potential aggregate demand curve is given by the ADA curve, resulting in the outcome illustrated by point A. The second potential aggregate demand curve is given by the ADB curve, resulting in the outcome illustrated by point B. PRICE LEVEL 108 107 106 105 104 103 AD2020 102 11 101 AS AD, ADB 100 00 0 2 4 10 OUTPUT (Trillions of dollars) 12 14 10 Suppose the unemployment rate is 6% under one of these two outcomes and 5% under the other. Based on the previous graph, you would expect to be associated with the lower unemployment rate (5%). If aggregate demand is low in 2021, and the economy is at outcome A, the inflation rate between 2020 and 2021 is

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter10: Kenesian Macroeconomics And Economic Instability: A Critique Of The Self Regulating Economy

Section: Chapter Questions

Problem 3WNG

See similar textbooks

Similar questions

In the year 2020, aggregate demand and aggregate supply in the fictional country of Drooble are represented by the curves AD2020AD2020 and AS on the following graph. The price level is 102. The graph also shows two possible outcomes for 2021. The first potential aggregate demand curve is given by the ADAADA curve, resulting in the outcome illustrated by point A. The second potential aggregate demand curve is given by the ADBADB curve, resulting in the outcome illus- trated by point B. PRICE LEVEL 108 107 106 105 104 103 102 101 100 0 AD 2020 2 ■ 4 B AS 6 8 10 OUTPUT (Trillions of dollars) ADA ADB 12 14 16 ? Suppose the unemployment rate is 6% under one of these two outcomes and 5% under the other. Based on the previous graph, you would expect to be associated with the higher unemployment rate (6%). If aggregate demand is low in 2021, and the economy is at outcome A, the inflation rate between 2020 and 2021 is Based on your answers to the previous questions, on the following graph use…
In the year 2023, aggregate demand and aggregate supply in the fictional country of Gizmet are represented by the curves AD2023 and AS on the following graph. The price level is 102. The graph also shows two possible outcomes for 2024. The first potential aggregate demand curve is given by the ADA curve, resulting in the outcome illustrated by point A. The second potential aggregate demand curve is given by the ADB curve, resulting in the outcome illustrated by point B. PRICE LEVEL 108 107 106 105 104 103 102 101 100 0 AD2023 2 4 AS ADA 12 ADB 6 8 10 OUTPUT (Trillions of dollars) 14 16 Suppose the unemployment rate is 6% under one of these two outcomes and 5% under the other. Based on the previous graph, you would expect to be associated with the lower unemployment rate (5%). If aggregate demand is low in 2024, and the economy is at outcome A, the inflation rate between 2023 and 2024 is
In the year 2027, aggregate demand and aggregate supply in the imaginary country of Daisen-Oki are represented by the curves AD2027AD2027 and AS on the following graph. The price level is currently 102. The graph also shows two potential outcomes for 2028. The first possible aggregate demand curve is given by the curve labeled ADAADA curve, resulting in the outcome given by point A. The second possible aggregate demand curve is given by the curve labeled ADBADB, resulting in the outcome given by point B. Suppose the unemployment rate is 7% under one of these two outcomes and 5% under the other. Based on the previous graph, you would expect (outcome A/outcome B) to be associated with the higher unemployment rate (7%). If aggregate demand is low in 2028, and the economy is at outcome A, the inflation rate between 2027 and 2028 is . Based on your answers to the previous questions, on the following graph use the purple point (diamond symbol) to plot the unemployment rate and…
The graph below is associated with a hypothetical country. Consider a decrease in aggregate demand (AD). Specifically, aggregate demand shifts to the left from AD to AD₂, causing the quantity of output demanded to fall at each price level. For instance, at a price level of 140, output is now $200 billion, where initially it was $300 billion. PRICE LEVEL 170 160 150 140 130 120 110 100 8 90 0 100 AD₁ AD₂ 200 300 400 500 600 OUTPUT (Billions of dollars): 700 800 ?
The graph below is associated with a hypothetical country. Consider an increase in aggregate demand (AD). Specifically, aggregate demand shifts to the right from AD1AD1 to AD2AD2, causing the quantity of output demanded to rise at each price level. For instance, at a price level of 140, output is now $400 billion, where initially it was $300 billion. Fill in the missing values in the table by selecting the change in each scenario required to increase aggregate demand. Change required to increase AD Expected rate of return on investment. (decrease/increase) Incomes in other countries (decrease/increase) Consumer expectations about future profitability. (improve/worsen) Government spending (increase/decrease)
What is the difference between the Keynesian zone, neoclassical zone, and intermediate zone in the AD/AS model? For each, predict the impact that an increase in aggregate demand would have on the price level relative to real GDP in each of those zones. How does the AD/AS model explain economic growth, recessions, as well as changes in unemployment and inflationary pressures?
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 120 110 AD, 100 90 100 200 300 400 500 600 700 800 OUTPUT (Billions of dollars) The following table lists several determinants of aggregate demand. Complete the table by indicating the change in each determinant necessary to increase aggregate demand. Change Needed to Increase AD Wealth Taxes Interest rates The value of the domestic currency relative to the foreign currency PRICE LEVEL
The table below shows information on aggregate supply, aggregate demand and the price level for the imaginary country of Xurbia. Price Level AD AS 110 700 600 120 690 640 130 680 680 140 670 720 150 660 740 160 650 760 170 640 770 Plot the AD/AS diagram from the data shown (Don't have to show graph but do draw it to help you answer the questions). a. Identify the equilibrium. b. Imagine that as a result of a government tax cut, aggregate demand becomes higher by 50 at every price level. Identify the new equilibrium. c. How will the new equilibrium alter output? How will it alter the price level? What do you think will happen to employment?
Graphically show the likely short-run impact on US real GDP and aggregate price level using the AD/AS model. Explain your prediction. Which curve in the AD/AS model would a change in US consumer consumption affect? Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
Use the following scenario for the next two questions. Suppose that the federal government decides to forgive all current (and future) outstanding student loans (estimated to total around $1.6 trillion as of early 2020). When thinking about the AD/AS model, which curve would this shift in the short-run, and in which direction? AD curve, to the left AD curve, to the right OSRAS curve only, to the right OSRAS and AD curves, to the left. OSRAS and LRAS curves, to the left
Review the problem shown in the Work It Out titled "Interpreting the AD/AS Model." Like the information provided in that feature, Table 24.2 shows information on aggregate supply, aggregate demand, and the price level for the imaginary country of Xurbia. Price Level AD AS 110 700 600 120 690 640 130 680 680 140 670 720 150 660 740 160 650 760 170 640 770 Table24.2 Price Level: AD/AS Plot the AD/AS diagram from the data shown. Identify the equilibrium. Imagine that, as a result of a government tax cut, aggregate demand becomes higher by 50 at every price level. Identify the new equilibrium. How will the new equilibrium alter output? How will it alter the price level? What do you think will happen to employment?
The following graph shows a decrease in aggregate demand (AD) in a hypothetical country. Specifically, aggregate demand shifts to the left from AD1AD1 to AD2AD2, causing the quantity of output demanded to fall at all price levels. For example, at a price level of 140, output is now $200 billion, where previously it was $300 billion. The following table lists several determinants of aggregate demand. Complete the table by indicating the change in each determinant necessary to decrease aggregate demand. Change needed to decrease AD Wealth (increase/ decrease) Taxes (increase/ decrease) Expected rate of return on investment (increase/ decrease) Incomes in other countries (increase/ decrease)