Drive the equation of Aggregate demand curve for two sector economy. Also drive the equation for equilibrium level of output for two sector economy. What will happen to the equilibrium level of output if government increase the transfer payments. Explain with the help of diagram.
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Question No.1
- Drive the equation of Aggregate demand curve for two sector economy. Also drive the equation for equilibrium level of output for two sector economy.
- What will happen to the equilibrium level of output if government increase the transfer payments. Explain with the help of diagram.
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- Economics 3040 Intermediate Macro HW4: An Adverse Demand Shock For all graphs label: both axis, all lines or curves, and all equilibrium values. Also be sure that the direction of shifts in lines and changes in equilibrium values are clear. Your graphs should be large enough to easily interpret. Turn in your graphs on paper at the beginning of the March 26th class meeting. (1) Sketch a graph of the goods market (AD-SRAS-LRAS) and a graph of the labor market with both markets initially in long run equilibrium. Label the initial values of real GDP, the price level, employment, and the nominal wage. Now show the effect of an adverse demand shock on both graphs and label the new values of all variables. (2) Sketch a graph of the goods market initially in a recession. Label potential real GDP, real GDP in the current recession, and the current price level. Also label the recessionary gap. Now show how an increase in government spending may end the recession. (3) Sketch a graph of the goods…Create a graph for an aggregate demand curve. Use the variable ‘Price Level’ for the vertical axis and ‘Real GDP’ for the horizontal axis. In your answer, explain why there is an inverse relationship between the price level and real GDP. Use your graph to illustrate your explanations. Also, discuss determinants of Aggregate Demandor factors that shift Aggregate Demand curve.16. The input-output table for a two-sector economy is given as follows: Input to sector AlInput sector B|Final Demand|Total Output Output from Sector A 200 50 50 Output from Sector B Other inputs Total Input 100 400 100 150 i. What is the basic assumption underlying the input- output model. ii. Use the basic assumption of the input-output model to complete the above denoted by?). iii. Write the matrix of technical coefficients. iv. Calculate the total output required from each sector when final demand increases by 20%. table (fill- entries
- 37.6% R Give Up? O Hint ment Score: Resources Chec on 5 of 15 <. In 2013, Prussia's aggregate demand curve was determined by the equation M +0= 4%. A change in aggregate demand means that in 2014, Prussia's aggregate demand curve was determined by the equation M +6= 7%. Using this information, draw Prussia's old and new dynamic aggregate demand curves on the graph. Which of the factors could have resulted in the change in 14 aggregate demand seen between 2013 and 2014? 13 O an improvement in technology 12 11 an increase in imports 10 a decrease in oil prices 8. AD 2013 O higher consumer confidence 7. 5. -3 -2 -1 3. 6. 10 Real GDP growth rate F12 AD 2014 4. 6, 4. Inflation rateCreate a graph for an aggregate demand curve. Use the variable ‘Price Level’ for the vertical axis and ‘Real GDP’ for the horizontal axis. Then explain why there is an inverse relationship between the price level and real GDP. Use your graph to illustrate your explanations. Also, discuss determinants of Aggregate Demand or factors that shift Aggregate Demand curve.Price index The graph below shows, the aggregate demand and supply for the economy of Etrusca. a. Draw AD2 on the graph below assuming an increase of $60 in aggregate demand. Plot only the endpoints of the curve below. Your Graph Score: 0% 140 130 120 110 100 06 90 80 200 240 280 320 360 400 440 480 520 560 Real GDP b. What is the new level of equilibrium GDP? $ 380 c. What is the new equilibrium price level? 55 AS AD. AD2 d. How much is the reduction in GDP due to the crowding out effect? $ 120
- What are the factors other than price that can shift aggregate demand curve interms of investment and consumption? Also explain graphically.The graph to the right shows an economy's aggregate demand curve. Show the determination of the economy's long-run macroeconomic equilibrium by (i) using the Line tool to draw and label the long-run aggregate supply curve to show an equilibrium and (ii) using the Point tool to identify the equilibrium point. Label this point E. Price level Real GDP AD EUsing aggregate demand and aggregate supply, graph the effects on the price level and GDP of each of the following. Draw a large graph and label all axes, initial and final equilibrium points, direction of shift if any, all curves and lines, equilibrium values on the x- and y-axes. State the conclusion in words. a. A cut in income taxes b. An increase in military spending c. A drop in export demand by foreign purchasers d. An increase in imports e. A decline in business investment spending
- Aggregate Demand Domestic Demand GDP (MP) Growth %Change Growth % Rates % of Rates % Change of Domestic Demand year Aggregate Demand 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Suppose this table into 3 categories (2008-2013), (2013-2017) & (2017-2021) and Comparative and critical analysis of the three categories based on your understanding.REPLY FAST PLZ 2.2 3.2 0.9 -0.59 1.4 -0.56 3.5 2.88 2.2 0.57 -0.31 3 -0.14 1.5 5.9 0.96 8 4.33 4.68 0.21 3.15 0.606 0.006 0.044 4.71 4.89 0.55 4.5 5.23 0.069 7.08 0.57 7.25 0.39 9.18 0.29 9.2 0.26 8.5 -0.07 8.5 -0.08 10.2 0.2 9.1 0.07 6.6 -0.35 6.4 -0.29 15.6 1.36 15.8 1.47A firm's health generally depends heavily on how well the economy is ding as a whole. The success of private businesses is largely influenced by an expanding economy and favorable macro trends. Give two instances of macroeconomics trends and how they might impact hiring, sales and profits for a company.What is the role of daynamic in macroeconomic? What are the diffrence between static and daynamic?
