Which of the following is a component of the structure of the short-run model? MP curve IS curve Phillips curve All of the above

Lucas's critique, based on rational expectations, argues that it is not enough to use econometric models to evaluate policy. In this regard, explain the comparison of the new classical macroeconomic model, the new Keynesian model and the traditional model on the impact of rational expectations on the aggregate economy!

Suppose to get re-elected, an incumbent government wants to continuously expand the economy so that people will associate high economic growth with the current government. Explain what will happen to the economy in the long run using the AD-AS model and the Phillips curve model, with properly labelled diagrams.  Thanks.

For Shock C: Suppose the economy starts in the long run equilibrium. Illustrate changes that the shock will cause in the short run (using AD-SRAS). Explain why each curve shifts. Determine how the price level and output will be affected in the short run. Mark the output gap on the diagram. Is the output gap positive or negative? Is the economy is booming, or is it in a recession? On the same diagram illustrate how the economy will adjust to the shock in the long run and explain the mechanism. Determine how the price level and output will be affected in the long run.   C. Firms expect an economic boom in the coming years   As a result of this shock, in the short run the (SRAS Curve/AD Curve) will shift? In consequence, in the short run prices and output will? In the short run, there will be a ? (negative/postive) output gap,which means there will be a ? (boom/recession) As time passes, because of high unemployment the wages in the economy will? (decrease/increase) As a result,…

If the central bank sells government securities from the private sector-money markets other things being equal, what would the effect be on the following? a)Aggregate demand b) Aggregate supply c)economic activity d)Inflation e)Unemployment

Do you believe that the Hayek’s classical AD-AS model explain the factors that cause changes (shifts) in AS realistically? Why or why not?

In the dynamic model of AD-AS in the diagram to the right, the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues policy. This will result in OA. short term interest rates higher than what would occur if no policy had been pursued. OB. unemployment rates higher than what would occur if no policy had been pursued. OC. real GDP lower than what would occur if no policy had been pursued. OD. inflation higher than what would occur if no policy had been pursued. MIDD Price level 102 100 LRAS, A 10 Real GDP B 00 LRAS AD. 10.8 11 SRAS₁ SRAS, AD₂

How could the static AD-AS model be used to show how the job keeper scheme could of sustain our economy even though unemployment was increasing?

How can you show an output gap on the vertical phillips curve model?(can use the full inflation targeting model if that helps)

What is the reason behind why the SRAS curve is upward sloping?     There are few unutilised resources     Higher price level means higher nominal wages     Higher price level means higher real wages     Lower price level will increase profit     Nominal wages and input costs are sticky in the short run