Price level (GDP deflator, 2009 = 100)The graph shows an economy's aggregate demand curve, short-run aggregatesupply curve, long-run aggregate supply curve, and equilibrium.Draw the AD curve when it is correctly expected that the inflation rate will be 20percent a year. Label it.Draw the SAS curve when a change to the money wage rate occurs that correctlyanticipates the increase in aggregate demand. Label it.Draw a point at the new equilibrium.As we move up along the LAS curve, theA. real wage rate is constantB. real wage rate is increasingC. real wage rate is decreasingD. money wage rate is constant130-120-110-100100-90-LAS13.0SAS0AD80-11.512.0 12.5 13.0 13.5 14.0 14.5 15.0Real GDP (trillions of 2009 dollars)>>> Draw only the objects specified in the question.

Answered: Image /qna-images/answer/48dbc026-6232-4bae-b3a8-a18660665983.jpg

Answered: Price level (GDP deflator, 2009 = 100)…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Deflation is particularly bad for an economy in recession for all of the following reasons EXCEPT a-with deflation people spend less expecting prices to be lower in the future b- the rising prices makes goods more expensive c- with deflation the value of assets declines while the value of loans does not - this lowers wealth and further depresses spending
Based on the picture, explain what happens to the price level. Describe your answer.
Aggregate demand function is given by Y=7000-20P; the shirt-run aggregate supply function is given by Y=6000+5(P-Pe). The economy was in equilibrium when the government unexpectedly increased its spending which led to a shift of the aggregate demand curve to Y=7500-20P. What's the rate of inflation? Please illustrate the calculations by means of an AS-AD graph.
The following graph represents the short-run aggregate supply curve (SRAS) based on an expected price level of 120. The economy's full- employment output level is $9 trillion. Major unions across the country have recently negotiated three-year wage contracts with employers. The wage contracts are based on an expected price level of 120, but the actual price level turns out to be 160. Show the short-run effect of the unexpectedly high price level by dragging the curve or moving the point to the appropriate position. PRICE LEVEL (CPI) 240 200 160 40 0 0 3 SRAS[120] 6 9 12 REAL GDP (Trillions of dollars) 15 18 SRAS[120] 0 (?) Interpret the change you drew on the previous graph by filling in the blanks in the following paragraph:
In order to improve the living standards of the people in Philippines after the devastating typhoon Haiyan, the government decided to increase the labour wage per hour from AUD 17.50 to AUD 25.00. Also, Philippines experienced structural unemployment and frictional unemployment. The figure below indicates that the aggregate demand curve slopes left to right downwards. 1)Explain the factors that account for the shape of the Aggregate demand curve. Graph:
There is a decrease in wealth what will happen to price level and real GDP
Explain two ways in which a recession might raise the natural rate of unemployment (Macroeconomics field of question)
Start at full-employment (FE) equilibrium with flexible wages and worker misperception of price level changes in the short run. Suppose then that we have an increase in Aggregate Demand. First, think about the short-run effects on price level (P), output level (Q), wage level (W), employment (L), and unemployment (U)? In the long run, once workers realize that there was a change in the price level, they will change the supply curve of labor. When all subsequent wage and price adjustments take place, we will be in a new long-run equilibrium. From the original full-employment (FE) equilibrium to the final one, what is the net change in the price level (P), output level (Q), the nominal wage (W), employment (L), unemployment rate (U), and the real wage (W/P)? Group of answer choices a) An increase in P, no change in Q, no change in W, an increase in L, an increase in U and no change in W/P. b) An increase in P, a decrease in Q, a decrease in W, a decrease in L, an…
Explain each of the following in terms of how changes in the price level and the effect on Aggregate Quantity Demanded: The Real Balances Effect (in your text this is referred to as the Wealth Effect) The Interest Rate effect The Foreign Purchases effect (in your text this is referred to as the Foreign Prices effect)
The graph shows the aggregate demand (AD) curve and the long-run aggregate supply (LRAS) curve for a hypothetical economy. Suppose that the economy observes an increase in the human capital of workers, causing productivity to rise. Show the effect of this change by shifting one of the curves in the graph. LRAS How will this change affect the rate of inflation? Inflation will fall Inflation will rise, Inflation will be unchanged. AD How will this change affect the growth rate? Real GDP growth rate The growth rate will decrease. The growth rate will increase. The growth rate will be unchanged.
The initial effect of a shift in the aggregate curve is a rise in both the price level and output * Leftward; supply Leftward; demand Rightward; supply Rightward; demand TOSHIBA
Price Level LRAS I о, он ог Real GDP SRAS, SRAS SRAS₂ ON=Natural Real GDP AD Refer to Figure 9-3. If the economy is in short-run equilibrium at point C, the (actual) unemployment rate is less than the natural unemployment rate. the (actual) unemployment rate is equal to the natural unemployment rate. the (actual) unemployment rate is greater than the natural unemployment rate. the relationship between the (actual) unemployment rate and the natural unemployment rate cannot be determined from the available information.

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