list 8 9 10 11 12 K The figure to the right shows the economy initially in equilibrium at output Yo Suppose that the price level in the economy increases. Using the line drawing tool, show the impact this increase has on the AE curve. Property label this line AE, Note: Carefully follow the instructions above and only draw the required object. According to your graph, the relationship between the price level and the level of aggregate output (income) is positive indeterminate negative Planned Aggregate Expenditure, AE 450 AE Aggregate output (income), Y AEO
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- Let's assume that prices substantially increased over the past year. How do you expect this will affect people's buying behavior? Be sure to tie this back to economic concepts discussed in this course. Time Atten 33 M.7. We ran a Vector-autoregresive model with two variables: with dtrade (change in trade balance), doilpr (change in oilpr) with one-lag and the result is as follows: dtrade 1st Lag of Trade Balance 1st Lag of Oil Price doilpr 1st Lag of Trade Balance 1st Lag of Oil Price Coef 0.48 275 0.04 1291 0.02 2939 0.35 7591 Std. Err 0.04 2789 0.02 1304 0.09 2198 0.04 5904 Z- statistic 11. 28 1.9 4 0.2 5 7.7 9 P>| zl 0 0.0 53 0.8 04 0 a) What can you infer from the result? b) Can you say anything about the long-run equilibrium value for change in trade- balance given the result?Assume an economy operates in the intermediaterange of its aggregate supply curve. State thedirection of shift for the aggregate demandor aggregate supply curve for each of thefollowing changes in conditions. What is theeffect on the price level? On real GDP? Onemployment?a. The price of crude oil rises significantly.b. Spending on national defense doubles.c. The costs of imported goods increase.d. An improvement in technology raises laborproductivity.
- Market equilibrium and disequilibrium The following graph shows the monthly demand and supply curves in the market for keyboards. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. 05010015020025030035040045050080726456484032241680PRICE (Dollars per keyboard)QUANTITY (Keyboards)Demand Supply Graph Input Tool Market for Keyboards Price (Dollars per keyboard) Quantity Demanded (Keyboards) Quantity Supplied (Keyboards) The equilibrium price in this market is per keyboard, and the equilibrium quantity is keyboards bought and sold per month. Complete the following table by indicating at each price whether there is a shortage or surplus in the market, the amount of that shortage or surplus, and…Explain the relationship that economic variables can have with businesscycles. These have both direction and timing. Give an example economicvariable of each combination of direction timing. Of these two attributes, ifyou had exclusive access to a reliable variable, which relationships wouldyou want this variable to have for forecasting purposesConsider the following actual and forecast demandlevels for Big Mac hamburgers at a local McDonald’s restaurant:DAY ACTUAL DEMAND FORECAST DEMANDMonday 88 88Tuesday 72 88Wednesday 68 84Thursday 48 80FridayThe forecast for Monday was derived by observing Monday’sdemand level and setting Monday’s forecast level equal to this demand level. Subsequent forecasts were derived by using expo-nential smoothing with a smoothing constant of 0.25. Using this exponential smoothing method, what is the forecast for Big Macdemand for Friday?
- What kind of economic changes in the economy would lead the curve tobe more steeply sloped?How do i trace this scenario on the circlar flow model, firms inventories unexpectedely rise?Suppose the economy of Hawkland is initially at full employment. Currently real GDP is $20 trillion, theprice level is 120, the money wage is $36/hour, the full employment quantity of labor is 300 billionhours per year, and the current unemployment rate is 6%. Draw a fully labeled graph depicting the aggregate goods and services market in Hawkland.Be sure to label all axes and include numerical values for variables on the axes where relevant. Providea brief explanation to the side and show any necessary calculations. Label any relevant curves with azero (0, for example: AD0) and use a zero in a circle to clearly label the initial equilibrium
- In 2013, Prussia's aggregate demand curve was determined by the equation M + 1-4% A change in aggregate demand means that in 2014, Prussia's aggregate demand curve was determined by the equation 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 irn aggregate demand seen between 2013 and 2014? 13 AD 2013 an improvement in technology O an increase in imports O higher consumer confidence O a decrease in oil prices 12 AD 2014 10 8 5 4 3 2 4 -3 2 1 0 1 2 3 4 5 6 78 9 10 Real GDP growth rate7. The accompanying scatter diagram shows the relation- ship between the unemployment rate and the output gap in the United States from 1996 to 2019. Draw a straight line through the scatter of dots in the figure. Assume that this line represents Okun's law: Unemployment rate=b-(mx Output gap) where b is the vertical intercept and -m is the slope. C Unemployment rate 10% 8 6 2 -6 -5 -4 -3 -2 -1 0 Data from: Federal Reserve Bank of St. Louis. A B 3% 1 2 Output gap What is the unemployment rate when aggregate output equals potential output? What would the unemploy- ment rate be if the output gap were 2%? What if the output gap were -3%? What do these results tell us about the coefficient m in Okun's law?== 2. Consider an IS/LM model of an economy with the following equations:C = 300+ 0.6Ydl 100 5iG 200TR = 200T 200T = 0.1YL = 0.4Y 30iM/P = 500(a) Using the above data, derive the equation for the IS schedule. (b) In this example, what is the equation for the LM schedule? (c) Using simultaneous equations calculate the equilibrium level of income and interestrates. Sketch the IS/LM equilibrium position. (d) What are the values of the monetary policy multipliers with respect to income andinterest rates? If the money supply is increased by 30, what are the new market clearing income and interest rate levels?