Suppose the economy produces real GDP of $45 billion when unemployment is at its natural rate. Use the purple points (diamond symbols) to plot the economy's long-run aggregate supply (LRAS) curve on the graph. PRICE LEVEL 132 128 124 120 116 112 108 104 100 0 10 20 30 40 50 60 70 80 REAL GDP (Billions of dollars) LRAS Help Clear All n the table, determine how each event affects the position of the long-run aggregate supply (LRAS) curve. Note: While economic growth generally shifts the LRAS curve to the right, some circumstances can shift it to the left. Event scientific breakthrough significantly increases food production per acre of farmland. government-sponsored training program increases the skill level of the workforce. he government allows more immigration of working-age adults. LRAS Curve Shifts to the... Right Left 4

Suppose the economy produces real GDP of $45 billion when unemployment is at its natural rate. Use the purple points (diamond symbols) to plot the economy's long-run aggregate supply (LRAS) curve on the graph. PRICE LEVEL 132 128 124 120 116 112 108 104 100 0 10 20 30 40 50 60 70 80 REAL GDP (Billions of dollars) LRAS Help Clear All n the table, determine how each event affects the position of the long-run aggregate supply (LRAS) curve. Note: While economic growth generally shifts the LRAS curve to the right, some circumstances can shift it to the left. Event scientific breakthrough significantly increases food production per acre of farmland. government-sponsored training program increases the skill level of the workforce. he government allows more immigration of working-age adults. LRAS Curve Shifts to the... Right Left 4

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter9: An Introduction To Basic Macroeconomic Markets

Section: Chapter Questions

Problem 15CQ

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I need some help figuring out how to draw these graphs. Thank you Suppose the economy of Hawkland is initially at full employment. Currently real GDP is $20 trillion, the price level is 120, the money wage is $36/hour, the full employment quantity of labor is 300 billion hours per year, and the current unemployment rate is 6% Draw a fully labeled graph depicting the aggregate labor market in Hawkland.Be sure to label all axes and include numerical values for variables on the axeswhere relevant. Provide a brief explanation to the side and show any necessary calculations.Label any relevant curves with a zero subscript (ex: LS0) and use a zero in a circle to clearly label the initial equilibrium. Part 2- 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. Provide a brief explanation to the side and show any necessary calculations.Label any relevant curves…
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
Using aggregate demand and aggregate supply, graph the effects on the price level and GDP of each of the following. Draw a large graph and label all axes, initial and final equilibrium points, direction of shift if any, all curves and lines, equilibrium values on the x- and y-axes. State the conclusion in words. a. A cut in income taxes b. An increase in military spending c. A drop in export demand by foreign purchasers d. An increase in imports e. A decline in business investment spending
Create a graph for an aggregate demand curve. Use the variable ‘Price Level’ for the vertical axis and ‘Real GDP’ for the horizontal axis. Then explain why there is an inverse relationship between the price level and real GDP. Use your graph to illustrate your explanations. Also, discuss determinants of Aggregate Demand or factors that shift Aggregate Demand curve.
Price Level LAS AS1 AD AS2 Real GDP Refer to the graph above to answer this question. If the economy was initially at point A, what would a movement to point B suggest? O The movement could be the result of an increase in nominal wages. The movement could be the result of an increase in prices. The movement could be the result of an increase in aggregate demand. The movement could be the result of increased government spending. The movement could be the result of a decrease in the costs of production.
The economy starts out on the curves AD, and SAS Suppose that people expect deflation (a falling price level), but aggregate demand remains at AD Draw a curve that shows what happens in the economy. Label it. Draw a point at the new equilibrium. Show Transcribed Text 240 200- 160- 120- 80 120 Price level (GDP deflator, 2007 = 100) LAS 40- 04 5 G 6 o SASO ADO 10 9 10 11 12 13 14 Real GDP (trillions of 2007 dollars) 15 Q Q
1. Key facts about economic fluctuations The graph included below approximates United States business cycles between quarter one of 1947 and quarter three of 1951. The shaded region denotes periods of six or more consecutive months of declining real gross domestic product (real GDP). W 1048 1040 1000 YEAR REAL GDP (Billions of dollars) 2170 2070 1970 1870 1770 1047 1001 Source: "Current-dollar and Real GOR" Bureau of Economics Analysis. last modified May 1, 13. accessed May 15. 13. http://www.bea.gov/national/xl/gdplev.. Notice that real GDP trends upward over time but experiences ups and downs in the short run. These short-run fluctuations in real GDP are often referred to as
The macroeconomy is depicted by the graph to the right 160- a. The current equilibrium price level and output level respectively are: and $ trillion. LRAS (Enter your responses as a whole numbers.) 140- SRAS 120- 100- 80- 60- AD 40- I 10' 12 14 16 18 20 Real GDP ($ trillions) Price level
The following graph shows several aggregate demand and aggregate supply curves for an economy whose potential output is $4 trillion. The curves are labeled a, b, c, and d. Three points on the graph are also indicated by grey stars and labeled X, Y, and Z. PRICE LEVEL AD 160 150 140 130 120 LRAS 110 B 100 90 80 0 Description с 1 d X 2 3 6 4 5 REAL GDP (Trillions of dollars) SRAS if the expected price level is 120 Identify which curve on the previous graph corresponds to each of the following descriptions. If the curve described is not shown on the graph, choose Not Shown. In the descriptions, AD represents aggregate demand; SRAS represents short-run aggregate supply; LRAS represents long-run aggregate supply. SRAS if the expected price level is 140 SRAS if the expected price level is 110 a O O O O O b 7 O O O с b O O 8 d O O O O O Not Shown ? O O O O O Suppose the economy is currently in short-run equilibrium at point Z. In this case, the economy is producing at an output level…
PRICE LEVEL 160 150 140 130 120 110 100 90 80 0 с 1 d X a 2 3 4 5 REAL GDP (Trillions of dollars) 6 + 7 b H 8 (?) Identify which curve on the previous graph corresponds to each description in the following table. If the curve described does not appear on the graph, choose Not Shown. Description Short-run aggregate supply (SRAS) when there is a recessionary gap Aggregate demand (AD) Short-run aggregate supply (SRAS) when there is an inflationary gap Short-run aggregate supply (SRAS) when the economy is in long-run equilibrium Long-run aggregate supply (LRAS) a O b O O O с O O O O d O O Not Shown
12. Assume that an economy operates according to the sticky-wage model. The nominal wage was set to make labor supply and labor demand equal when the expected price level equaled 120 (as measured by the consumer price index). a. Use a graph of the labor market to illustrate what happens to the quantity of labor employed if the actual price level over the time period when wages are stuck equals 110. b. Use a graph of the production function to illustrate how the quantity of output produced changes if the actual price level equals 110 when the expected price level is 120. c. Given the unexpectedly low price level, will this economy be operating above, below, or at the natural rate?