For each of the following events, draw an aggregate-demand/aggregate supply diagram and explain the short-run effects on output and the price level in the U.S., assuming policymakers take no action. (d) The Coronavirus outbreak causes disruption in supply chain and manufacturing operations around the world. (e) A ten-year-old investment tax credit expires.
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For each of the following events, draw an aggregate-demand/
(d) The Coronavirus outbreak causes disruption in supply chain and manufacturing operations around the world.
(e) A ten-year-old investment tax credit expires.
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- An increase in the price level causes the aggregate supply curve to shift to another supply schedule. True or FalseA decrease in the availability of an important major resource such as oil shifts aggregate supply left. True or FalseWhich of the following would properly be classified as a favorable supply shock? a)A hurricane hits a major city, destroying factories, roads, airports, and homes. Because the city was a major port and transportation hub, goods and services need to be rerouted, increasing transportation costs for firms nationwide. b)The interest rate decreases, spurring investment spending. c)There is a technological improvement that allows firms to reduce their costs of production permanently. d)There is an increase in government spending. e)The world price of oil increases rapidly without warning and is expected to remain at the new high level for many years, making it more expensive for all firms to produce goods and services.
- The consequences of climate change on the economy is a popular topic in the media. Suppose that a series of wildfires destroys crops in the western states at the same time a hurricane destroys refineries on the Gulf Coast. a) Using aggregate demand and supply analysis, explain how output and the inflation rate would be affected in the short and long runs. b) Show your answer graphically.What kind of change would happen to aggregate demand, aggregate supply, and real GDP. if foreign countries purchase an unusually large number of U. S. manufactured passenger and military airplanes.Evaluate 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.
- Answer the following questions on the basis of the following three sets of data for the country of North Vaudeville: (A) (B) (C) Price Price Price Level Real GDP Level Real GDP Level Real GDP 110 225 110 275 100 200 100 225 100 250 100 225 95 225 95 225 100 250 90 225 90 200 100 275 a. Which set of data illustrates aggregate supply in the immediate short run in North Vaudeville? (Click to select) ▼ The short run? (Click to select) V The long run? (Click to select) V b. Assuming no change in hours of work, if real output per hour of work increases by 5 percent, what will be the new levels of real GDP in the right column of B? Instructions: Enter your answers rounded to 1 decimal place. At a price level of 110: At a price level of 100: At a price level of 95: At a price level of 90: Does the new data reflect an increase in aggregate supply or does it indicate a decrease in aggregate supply? (Click to select)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 lives“Prices gouging” is the practice of raising the price of essential goods during a shock to demand. An example is the demand for facemasks in the summer of 2020. Increases in price often cause distress, which has led policymakers to consider banning price increases during crises. Consider the costs and benefits of this policy in a supply and demand framework.
- Show the effect this shock has on the market for almonds by shifting the demand curve, supply curve, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. PRICE (Dollars per ton) 40 32 32 Supply Demand 24 24 16 8 0 8 16 24 Demand QUANTITY (Thousands of tons) 32 40 Supply One of the growers is pleased with the price increase caused by the pests because she believes it will lead to increased revenue. Using elasticities, you will be able to determine whether this price change will lead to a rise or fall in total revenue in this market. Using the midpoint method, the price elasticity of demand for almonds between the price levels of $20 and $28 per ton is between these two points, demand is . Thus, you can conclude that the grower's claim is due to the pestilence. meaning that because total revenue will Confirm your previous…An increase in price expectations shifts the long-run aggregate-supply curve to the left True/FalseInclude correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to "Calculate," you must show how you arrived at your final answer.Respond to all parts of the Question. The economy of Country X is in equilibrium at full employment.(a) Draw a correctly labeled graph of the long-run aggregate supply, short-run aggregate supply, and aggregate demand curves, and show each of the following. (i) The current equilibrium price level, labeled PL (in) The current equilibrium real output, labeled Y(b) Assume that household income increases as a result of recent economic prosperity in Country X. On your graph in part (a), show the effect of the increase in household income on real output and the price level(c) What will be the effect of the change identified in part (b) on unemployment in Country X? (d ) Will the change in real output shown…