(2nd) outward/ inward (3rd) supply/ demand (4th) an increase/decrease MINDTAP Ap
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Question
(2nd) outward/ inward(3rd) supply/ demand (4th) an increase/decrease
MINDTAP Aplia Homework: An Introduction to Macroeconomics Attempts: 15 13 Keep the Highest: 15/3 7. The Great Recession and the collapse of the housing bubble Consider the following dialogue about the crash of the housing market and the Great Recession of 2007-2009 between two students in a economics EDISON: Hi, Hilary. I enjoyed the discussion of the housing bubble in today's lecture. But I dont understand how the professor uses the aggregate demand and aggregate supply model to explain the macroeconomic effects of the collapse of the housing bubble. HILARY: Hi, Edison. I'm intrigued to see how the theory can explain the recent economic events that affected so many families. The professor in spending on construction of new houses causes in the number of new homes built, which used the aggregate demand and aggregate supply model to show that v shift of the aggregate curve and thus leads to affects the GDP. I can illustrate this on a graph On the following graph showing the aggregate demand (AD) and aggregate supply (AS) curves, shift the relevant curve to iMustrate Hilary's explanation of the effect of the collapse of the housing bubble on domestic product. BuAD10 10TRFall17 (7) doex Ch04 PPT Baumol1...pptx . Anaylsis Paper 2 (Pe.
Explanation / Answer
a. increase in spending wil lead to an outward shift of AD curve leading ton increase in new homes built.
b.AD will shift outward
c.Lot of irregularities arounf financial markets around sanctioning loans to subprime population was reason for economic downturn
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