Suppose that the economy is initially in long-run equilibrium with the price level of 800.Now suppose that the Aggregate Demand (AD) curve shifts left from AD1 (blue) to AD2 (green).Price Level1200+11001000ADX900-800AD700-SRASI600*500400300200100LRAS200 300 400 500 600 700 800 900Real GDPWhat is GDP in the new long-run equilibrium as a result of this shift?1001000 1100 120

The economy was initially performing at the price level of $800 and a real GDP of 200 units. It is…

Suppose that the economy is initially in long-run equilibrium with the price level of 800. Now suppose that the Aggregate Demand (AD) curve shifts left from AD1 (blue) to AD2 (green). 1200- 1100- 1000 Price Level ADX 900- 800* ADX 700 SRASI 600 500 400- 300- 200 100 LRAS 200 300 400 500 600 700 800 900 Real GDP What is GDP in the new long-run equilibrium as a result of this shift? 100 1000 1100 120 a

Suppose that the economy is initially in long-run equilibrium with the price level of 800. Now suppose that the Aggregate Demand (AD) curve shifts left from AD1 (blue) to AD2 (green). 1200- 1100- 1000 Price Level ADX 900- 800* ADX 700 SRASI 600 500 400- 300- 200 100 LRAS 200 300 400 500 600 700 800 900 Real GDP What is GDP in the new long-run equilibrium as a result of this shift? 100 1000 1100 120 a

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The graph below shows the AD-AS diagram for Spain. Suppose that the economy is initially in long-run equilibrium with the price level of 900. Now suppose that the Aggregate Demand (AD) curve shifts left from AD1 (blue) to AD2 (green). 1200 AD 1100 1000 Price Level ADS 900- 800 79R ST 600* 500 400 300 200- 100- LRAS 100 200 300 400 500 600 700 800 900 1000 1100 120 Real GDP Q 1. What is the new GDP in the short-run as a result of this shift? I 2. What is the new price level in the short-run as a result of this shift? 3. What is the price new long-run equilibrium as a result of this shift? 4. What is GDP in the new long-run equilibrium as a result of this shift? 5. What causes the economy to move from the short-run equilibrium to the new long-run equilibrium? O Decreased wages. O increased wages. O Increased prices. O Decreased prices.
40 AD 3 38 AS 36 - AD 2 34 - 32니 AD, 30 28 - 26 24 - 22 - 20 4 10 12 14 18 18 20 Real Output (quantity in billions per year) Suppose the economy is at full employment when AS = AD2. billion a. The GDP gap when the demand curve is at AD1 is billion o. The GDP gap when the demand curve is at AD3 is Price Level (average price)
The graphs illustrate an initial equilibrium for some economy. Suppose that the economy experiences a rise in aggregate demand. Use the graphs to illustrate the new positions of AD, SRAS, and LRAS as well as the new short-run and long-run equilibria resulting from this change. Short-Run Graph Long-Run Graph LRAS LRAS SRAS SRAS Equilibrium point Equilibrium point AD AD Real GDP Real GDP Aggregate price level Aggregate price level
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Using an AD/AS diagram (starting from long-run/full employment equilibrium), graphically show and verbally describe how each of the following events would affect the U.S. economy's equilibrium real GDP and price level. a. Discovery and implementation of new technology b. Mexico's economic growth increases faster than ours c. There is a general increase in the price of raw materials e. The cost of labor (wages) rises g. The price of oil is expected to fall d. The number of workers in the labor force decreases due to pandemic retirements/death f. A new Congress decreases government spending h. Consumer confidence falls
Suppose that the economy is initially in long-run equilibrium with the price level of 800. Now suppose that the Aggregate Demand (AD) curve shifts left from AD1 (blue) to AD2 (green). 1200 ADX 1100- 1000 Price Level ADX 900- 800 700 600 50% RASI 400* 300- 200 100- LRAS 400 500 600 700 100 200 300 Real GDP What is the new price level in the short-run as a result of this shift? 800 900 1000 1100 120 a
Consider the following ADVAS diagram of the macroeconomy, with LRAS shown as the vertical curve, AD as the downward sloping curve and SRAS as the upward sloping curve Place a point at the current equilibrium Then, use the segment tool to draw a new SRAS curve (parallel and of equal size to the one shown here that shows the long run self-correction that will bring this economy back to long-run equilibrium Finally, place a point at the new long run and short librum using the point tool Segment - Radi Rest Price Level Real GDP (billions) Und
Please draw on top of graph
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