Determine the price level of graph, Econometrics

Suppose that the aggregate demand curve in a particular year is given by the algebraic

          expression:  Y = 3000 + 1000/P, where Y is the aggregate output and P is the price level as given by the GDP Deflator.  Potential GDP (Y*) = 4000.

a.  Plot aggregate demand and long run aggregate supply curves. Show aggregate demand schedule.

b.  Suppose that the prices are flexible.  Determine the price level and show it on the graph.

c.  Now suppose that the following year, the aggregate demand curve is given by:

Y = 3000 + 1100/P.  In what direction has the aggragate demand curve shifted? If  the aggregate output remains at the potential level, determine the new price level.  Calculate the rate of inflation between the two years.

 

 

 

Posted Date: 3/12/2013 5:20:59 AM | Location : United States







Related Discussions:- Determine the price level of graph, Assignment Help, Ask Question on Determine the price level of graph, Get Answer, Expert's Help, Determine the price level of graph Discussions

Write discussion on Determine the price level of graph
Your posts are moderated
Related Questions
Plot the appropriate short run and revenue curves ( you may need more than one diagram, and tables) to determine at which price and output levels "Draw Ltd", would achieve:

given the formula for f statistic prove that by using the f statistic you can derive this formula

Consider the study of the effect of public-sponsored training programs. As argued in public programs of training and employment are designed to improve participant's productive ski

This problem refers to Doughtery's Educational Attainment and Earnings Functions (EAEF) data set, accessible through the course website. This data is a subset of the U.S. National

Y1=Y21Y2+Bx+U1 Y2=Y21Y1+U2 First equation is demand and second is supply equation,can first equation be identifiable outline the method

Hi I am currently working on my econometrics coursework which is to replicate a published paper. I was given the same data set as the paper and suppose to get the same answer as th

A thick walled cylinder has internal and external diameters of 120 mm and 420 mm respectively. It is made from a ductile elastic material of your choice and is used to contain hot

suppose only one professor teaches economics at your university, would you say that this prof is a monopolist who can exact any price from students in the form of readings assigned


Let W be a random variable such that Supp (W) = {2, -1, 0, 1, 2 } and What is p? Define U = W 2 . What is Supp (U) and fU (u) = Pr [U = u] for u ∈ Supp (U)? Compute E [W] a