(Figure: Predicting Aggregate Demand Shifts) Which of the following would shift the aggregate demand curve from AD 2 to AD 1? A. an increase in government purchases B. an increasing consumer pessimism about the future C. a tax cut D. an decrease in interest rates
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- Review the problem 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. Plot the AD/AS diagram from the data. 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?How is pressure for inflationary price increases shown in an AD/AS model?The imaginary country of Harris Island has the aggregate supply and aggregate demand curves as Table 24.3 shows. Plot the AD/AS diagram. Identify the equilibrium. Would you expect unemployment in this economy to be relatively high or low? 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. Identify the new aggregate equilibrium. How will the shift in AD affect the original output, price level, and employment?
- How is recession illustrated in an AD/AS model?urgent plz dont copy from anywhere Question 3 [Consider how the COVID-19 pandemic has caused major disruption in global supply chain affecting the supply of critical inputs to production. This has negatively affected the supply side of Singaporean economy on a large scale.] (a) [Illustrate the impact of this supply-side disruption on the Singaporean economy using the AD-AS model. Assume that the economy was initially in good shape and operating at its potential represented by Y*. Provide an explanation to explain what is happening in your diagram. (100 words)] (b) [Following this shock to the economy, as described in part (a) of this question, indicate what would be the response of the Central Bank for each of the scenarios below. Highlight any trade-offs that the Central Bank must consider for each of these potential responses (100 words total) Scenario (i) - Assume the Central Bank is most concerned about inflation. Scenario (ii) - Assume the Central Bank is most concerned about…Assume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on: aggregate demand, aggregate supply, price level, real GDP.(a) A decrease in government expenditure in infrastructure(b) A severe recession occurs in a country which has been a major importer of thenation’s exports.(c) The federal government increases business taxes with diagram
- Figure: Aggregate Supply Aggregate price level 0 Reference: Ref 12-5 LRAS Potential GDP SRAS Real GDP Figure: Aggregate Supply) Look at the figure Aggregate Supply. If the economy is at point E A potential output will decrease B. actual output is less than potential output C. actual output is more than potential output D. actual output is equal to potential outputPrice level (P) LRAS SRAS2 SRAS, В A AD2 AD, Real GDP (7) Based on the graph, a decrease in Point D to Point A could cause the economy to move from government spending exports on apples restrictions from the Environmental Protection Agency on car production in the U.S. inflation the demand for consumer goods Question 8 Suppose housing values fell during the recession of 2008. Therefore, O the price level will fall as the aggregate demand curve shifts to the left.1. Which of the following could cause a shift from AD to AD₁, ceteris paribus? PRICE LEVEL a a Figure 10.1 REAL OUTPUT ($ billions per year) B) an increase in exports A) a decrease in investment AD OC) an increase in consumer confidence OD) an increase in consumption AS 4
- Refer to the information provided in Figure below to answer the question(s) that follow. AS2 AS1 ASo AD1 Y Y2 Y Yo Aggregate output Figure Refer to Figure Assume the economy is at Point A. Lower oil prices shift the aggregate supply curve to ASO. If the government decides to counter the effects of lower oil prices by decreasıng government spending, then the price level will be than Po and output will be than Y0- Select one: a. greater; greater b. less; less C. greater; less d. less; greater Price level2. An introduction to the AD-AS model The aggregate demand and aggregate supply model is a useful simplification of the macroeconomy used to explain short-run fluctuations in economic activity around its long-run trend. The vertical axis of a diagram of the aggregate demand and aggregate supply curves measures which of the following? An economy’s price level The amount of a particular representative good produced in the economy The price of a particular representative good produced in the economy Which of the following are reasons that the short-run aggregate supply curve slopes upward? Check all that apply. As the price level rises, firms expand their production because they can sell their output for more money. As the price level rises, firms find it more profitable to hire workers at any given wage. As the price level rises, firms decrease their investment because it is more expensive to purchase capital.Exhibit: The Aggregate Demand/Aggregate Supply Model 1 Which of the following statements is true?Group of answer choicesThe economy depicted in the figure experiences a recessionary gap = Yp - Y1. The economy depicted in the figure experiences a recessionary gap = YpY2. The economy depicted in the figure experiences a recessionary gap = Y2 - Y1. The economy depicted in the figure is in long-run equilibrium but not in short-run equilibrium./bar (Real GDP per year) ง Price level LRAS SRAS P3 P2 P₁ I Y₁ D Y2 Yp AD Real GDP per year