Using the “dynamic aggregate demand” and “dynamic aggregate supply” (DAD/DAS) model: (a) draw a graph and discuss the effect of a reduction in aggregate demand.
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Using the “dynamic aggregate demand” and “dynamic
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- Do you need the aggregate demand model to determine the equilibrium of the IS curve model?The principal goal of the aggregate demand and aggregate supply model is to explain theUsing the “dynamic aggregate demand” and “dynamic aggregate supply” (DAD/DAS) model: (b) draw a graph and discuss the effect of an adverse supply shock, such as a rise in oil prices.
- The following graph shows an aggregate demand curve (AD) illustrating the inverse relationship between the price level and the quantity of Real GDP in the United States. During World War II, the United States increased military spending. Show the effect of the following scenario on the aggregate demand curve by dragging the curve or moving the point to the appropriate position. Note: Tool tip: To move the curve, click and drag any part of the curve. The curve will snap into position, so if you try to move it and it snaps back to its original position, just try again and drag it a little farther. PRICE LEVEL Aggregate Demand I I " I 1 REAL GDP AD AD (?)Are the determinants of aggregate demand the same things that apply to demand for an individual good?The imaginary country of Harris Island has the aggregate supply and aggregate demand curves as Table shows. Price Level: AD/AS Price Level AD AS 100 800 300 120 700 425 140 600 600 160 500 670 180 400 720 Plot the AD/AS diagram (You don't have to submit the plot, but I recommend doing it as it will help you with this problem). Identify the equilibrium. Blank #1 - Equilibrium Price Level Blank #2 - Equilibrium GDP Blank #3 - Would you expect unemployment in this economy to be relatively high or low? Blank #4 - Would you expect concern about inflation in this economy to be relatively high or low? Imagine that consumers begin to lose confidence about the state of the economy, and so AD becomes lower by 275 at every price level. Blank #5 - What is the new equilibrium GDP? Blank #6 - What is the new equilibrium Price Level? How will the shift in AD affect (answer is rise or fall)..
- The imaginary country of Harris Island has the aggregate supply and aggregate demand curves as Table shows. Price Level: AD/AS Price Level AD AS 100 800 300 120 700 425 140 600 600 160 500 670 180 400 720 Plot the AD/AS diagram (You don't have to submit the plot, but I recommend doing it as it will help you with this problem). Identify the equilibrium. Blank #1 - Equilibrium Price Level Blank #2 - Equilibrium GDP Blank #3 - Would you expect unemployment in this economy to be relatively high or low? Blank #4 - Would you expect concern about inflation in this economy to be relatively high or low? Imagine that consumers begin to lose confidence about the state of the economy, and so AD becomes lower by 275 at every price level. Blank #5 - What is the new equilibrium GDP? Blank #6 - What is the new equilibrium Price Level? How will the shift in AD affect (answer is rise or fall)... Blank #7 - the original output? Blank #8 - the price…Discuss one (1) reason for the downward sloping aggregate demand curve.Using the “dynamic aggregate demand” and “dynamic aggregate supply” (DAD/DAS) model: draw a graph and discuss the effect of an adverse supply shock, such as a rise in oil prices. (Your answer should be 150 words ±10%)
- Evaluate the following statements using relevant diagrams and provide detailed explanations. The statements describe events that might shift aggregate demand (AD), aggregate supply (AS), both or neither. Clearly label your diagrams. A recent economic report suggests that consumer confidence has increased Apple Inc. has announced a 50% discount on its new generation iPad devices for university students After a prolonged acceleration in economic activity, the government raises the rate of personal income tax. A continuing economic expansion has drawn in many working age people (and their families)from neighbouring countries in search of jobs and better livesEvaluate the following statements using relevant diagrams and provide detailedexplanations. The statements describe events that might shift aggregate demand (AD),aggregate supply (AS), both or neither. Clearly label your diagrams. A) A recent economic report suggests that consumer confidence has increased.B) Apple Inc. has announced a 50% discount on its new generation iPad devices foruniversity students.C) After a prolonged acceleration in economic activity, the government raises the rateof personal income tax.D) A continuing economic expansion has drawn in many working age people (andtheir families) from neighbouring countries in search of jobs and better lives.Using a macroeconomics demand/supply analysis, where do you think current output is relative to what the economy is capable of producing? Look at recent trends in the data. What are the recent trends in the components of aggregate demand (consumption spending, investment spending, government purchases, and exports and imports?
