The figure above shows the aggregate demand, long-run aggregate supply, and shor
ID: 1179462 • Letter: T
Question
The figure above shows the aggregate demand, long-run aggregate supply, and short-run aggregate supply functions for a country. Wages and prices are rigid in the short run, but adjust to market conditions in the long run. Currently P = 100 and Y = 1000. Analyze the short-run and long-run consequences of the following events on the price level (P) and the real GDP (Y). The questions are independent of each other. The answer to each question should be a short paragraph.
a.
1) As in 1990-91, consumer confidence plummets and the aggregate demand function shifts to the left by 800 units (Shift the AD function to the left by 800 units). What will happen to P and Y in the short run (please give me the numbers)? What will happen to P and Y in the long run (please give me the numbers)? Describe the process of self-correcting mechanism from the beginning to the end.
b.
2) After the demand curve shifted to the left in part
The figure above shows the aggregate demand, long-run aggregate supply, and short-run aggregate supply functions for a country. Wages and prices are rigid in the short run, but adjust to market conditions in the long run. Currently P = 100 and Y = 1000. Analyze the short-run and long-run consequences of the following events on the price level (P) and the real GDP (Y). The questions are independent of each other. The answer to each question should be a short paragraph. As in 1990-91, consumer confidence plummets and the aggregate demand function shifts to the left by 800 units (Shift the AD function to the left by 800 units). What will happen to P and Y in the short run (please give me the numbers)? What will happen to P and Y in the long run (please give me the numbers)? Describe the process of self-correcting mechanism from the beginning to the end. After the demand curve shifted to the left in part "a" above, what kind of a demand-management policy would a typical liberal economist propose, an active policy or do nothing? How about a conservative economist? What justifications would they provide for their respective proposed policies?Explanation / Answer
figur is not visible ..
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.