Accelerator influence both aggregate demand and supply

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How does the Financial Accelerator influence both aggregate demand and supply? How is Bernanke & Gertler’s analysis pro-cyclical?Consider the following functions: Qd = -4P + 190 and Qs = P - 10. Further assume that the government has institutes a price floor of $45 in this market.

Calculate the amount of consumer and producer surplus in the market before the price floor is put into place.

Calculate the net changes in both consumer and producer surplus after the price floor has been put into the market. (meaning the area of net gained producer surplus, lost producer surplus, and net lost consumer surplus)

Calculate the amount of dead weight loss that was created by this price floor.

Generate a graph and clearly denote the areas of consumer surplus loss, producer surplus gain, producer surplus loss, as well as the dead weight loss after the price floor.

Reference no: EM131393585

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