Compute the equilibrium level as-ad model, Macroeconomics

1. Use the AS/AD model to

a. Demonstrate graphically and explain verbally the situation the US economy is currently in.

b. In the diagram you drew for part (a) above, show the impact the Obama administration stimulus package is designed to have on the economy.

c. Discuss how knowing the exact value of potential income/output will impact your answers to (a) and (b) above. NOTE: You do not need to draw any more diagrams here.

2. Consider an economy characterized by the following AE equation: AE = 4000 + 0.8Y.

a. Compute the equilibrium level of Y and illustrate the equilibrium in an AE/AP diagram.

b. Suppose autonomous investment increased by 300. Illustrate the impact of this change in the diagram you drew for part (a) above. NOTE: Be sure to compute the new equilibrium level of Y and include it in your diagram.

c. Correctly link up your diagram for (a) and (b) above to an AS/AD diagram. Be sure to completely label your AS/AD diagram.

 

 

 

 

 

Posted Date: 3/1/2013 7:39:14 AM | Location : United States







Related Discussions:- Compute the equilibrium level as-ad model, Assignment Help, Ask Question on Compute the equilibrium level as-ad model, Get Answer, Expert's Help, Compute the equilibrium level as-ad model Discussions

Write discussion on Compute the equilibrium level as-ad model
Your posts are moderated
Related Questions
What is gross national income per capita The absolute difference in gross national income per capita is 29,828 PPP$ that means UK income per capita is approximately 860% higher

using a graph of the classical labour market, illustrate the effects of a real wage existing in the market that is lower than the equilibruim real wage.what will eventually happen

Ask Jenny, your niece, is a smart high-school student who wants to make smart choices for her future. Hearing of your course in Business Economics, she has emailed you asking for a

According to the imperfect-information model, when the price level is greater than the expected price level, output will _____ the natural level of output A) be greater than

All of the following fiscal policies will contribute to increasing budget deficits except: A. cuts in aid to farmers. B. tax cuts. C. increases in defense expenditures. D. increase

The economy of Mainland has the following aggregate and aggregate supply schedules:                               Real GDP Demanded                         Real GDP Supplie

1. Nations trade what they produce in excess of their own consumption to: A) generate jobs for the domestic economy. B) earn “good will” from the World Bank. C) prevent chronic sur

You are developing a sampling protocol whereby you're going to insert a probe into a turbulent flow in a circular conduit of radius R. a. Using a description of a velocity profi

Subsidy programs are likely to have a number of secondary effects in addition to the direct effect on dairy prices. What impact do you suppose farm subsidies are likely to have on

Imagine a firm with the same cost structure but in each of the four market structures: Competitive, Monopolistically Competitive, Oligopoly, and a Monopoly. Using the concepts of c