Determine the price level of graph, Econometrics

Assignment Help:

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.

 

 

 


Related Discussions:- Determine the price level of graph

Pigouvian, In the United States, a buyer of a new electric is eligible for ...

In the United States, a buyer of a new electric is eligible for a one-time federal income tax credit of up to $4,000. Show the effect of this tax credit graphically, assuming the $

Hetrosedastcity, cost function; expenditure=B1+B2N+B3N+U EXP=17099+1.60N-1....

cost function; expenditure=B1+B2N+B3N+U EXP=17099+1.60N-1.2Q regration sum of square=8 qutinos 1 explain inter prtation

Stata, Please help me in using Stata

Please help me in using Stata

Equation prove, prove that summation k =0 and summation kxi=1

prove that summation k =0 and summation kxi=1

Dropout equation - unemployment variable, Consider the following equations ...

Consider the following equations designed to estimate  a school's test scores (Test) and the school's dropout rate (Drop). Test i = B 0 + B 1 *Parent Ed i + B 2 *school quali

Firm''s marginal revenue function, A firm has the following inverse demand ...

A firm has the following inverse demand function:       where Q  is Quantity and P  is Price   (a) Find the firm's marginal revenue function. (b) Find the level of out

Equilibrium conditions for three related markets , The equilibrium conditio...

The equilibrium conditions for three related markets are given by:  (a)Write this system of equations in matrix notation of the form  Ax = B.  (b)  Find the determinant

Calculate expected profit and decision tree, It was shortly before noon. Mr...

It was shortly before noon. Mr. Zhi-Long Chen, director of Overnight Delivery Operations at Capital Crab and Lobster, Inc.(CCL) in Washington DC, anxiously watched the Weather Chan

E-views, The following table gives data on the Consumer Price Index (CPI) a...

The following table gives data on the Consumer Price Index (CPI) and the Standard & Poor (S&P) company''s index of 500 common stock prices. Year CPI Index S&P 500 Index 1978 65.2 9

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd