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- Policymakers who can influence AD cannot offset the adverse effects of a recession due to a fall in AS’. Do you agree with this statement? Explain the answer in words and using an AD-AS diagramReview the problem in the Work It Out titled"Interpreting the AD/AS Model." Like the informationprovided in that feature, Table 24.2 shows informationon aggregate supply, aggregate demand, and the pricelevel for the imaginary country of Xurbia. a. Plot the AD/AS diagram from the data. Identifythe equilibrium.b. Imagine that, as a result of a government taxcut, aggregate demand becomes higher by 50 atevery price level. Identify the new equilibrium.c. How will the new equilibrium alter output? Howwill it alter the price level? What do you thinkwill happen to employment?E3 Suppose the government of a typical developing country increased the salary of civil servants at a time when there is a bumper harvest due to timely rainfall. show using your knowledge of the AD-AS framework, What will happen to prices?
- What are some of the ways in which exports and imports can affect the AD/AS model?How is long-term growth illustrated in an AD/AS model?Suppose Mexico, one of our largest trading partners and purchaser of a large quantity of our exports, goes into a recession. Use the AD/AS model to determine the likely impact on our equilibrium GDP and price level.
- Many financial analysts and economists eagerly await the press releases for the reports on the home price index and consumer confidence index. What would be the effects of a negative report on both of these? What about a positive report?How is recession illustrated in an AD/AS model?In the above figure; when the economy is in a longr run equabrium, the price level will be 90 . 110. 120, 100
- The table below shows information on aggregate supply, aggregate demand and the price level for the imaginary country of Xurbia. Price Level AD AS 110 700 600 120 690 640 130 680 680 140 670 720 150 660 740 160 650 760 170 640 770 Plot the AD/AS diagram from the data shown (Don't have to show graph but do draw it to help you answer the questions). a. Identify the equilibrium. b. Imagine that as a result of a government tax cut, aggregate demand becomes higher by 50 at every price level. Identify the new equilibrium. c. How will the new equilibrium alter output? How will it alter the price level? What do you think will happen to employment?Using AD-AS analysis show graphically and explain the effect on the equilibrium level of price and income if: Increase in productivity of labour after attending the intensive course from their company. National per capita income has increased from RM40,713 in 2018 to RM42,777 in 2019. Dear experts, please explain me each of it seperately with full explanation so I could understand it better. Thanks in advadnce.Economist A believes that changes in aggregate demand affect only the price level, and economist B believes that changes in aggregate demand affect only Real GDP. Use the following graphs to answer the question that follows. Graph A Graph B AS AS AD AD, REAL GOP REAL GOP PRICE PRICE