User Account

All Pages

Draw the initial long run equilibrium using ad-as diagram

Assignment Help Macroeconomics
Reference no: EM132606785

Draw the initial long run equilibrium using AD-AS diagram. Now suppose a positive supply shock such as a fall in oil price happens.

a. Show the effect of this positive shock in the output market as well as on the short run and long run Phillips Curve diagram. Label the points in both diagrams clearly. If you label point A on one diagram, show point A on the other to demonstrate the situation of unemployment and inflation on the Phillips curve diagram too.

b. Show (on the diagrams you drew above) how the economy will adjust in the long run if Bank of Canada uses expansionary monetary policy (increasing money supply). What happens to inflation and unemployment?

c. Show what happens if the BoC uses contractionary monetary policy (decreasing money supply). What happens to inflation and unemployment? Draw a new set of diagrams to show this effect. Clearly show points A, B and C on both the diagrams.

Reference no: EM132606785

Questions Cloud

Aggregate supply and aggregate demand model : Draw the aggregate supply and aggregate demand model to show the initial long run equilibrium in the real output market.
How would go about mapping the balances on a T chart : How you would go about mapping the balances on a T chart of accounts and explain why you would follow this methodology. Explain in detail with an example.
How many ways can five books be arranged in a shelve : How many ways can five books be arranged in a shelve and How many three digit even numbers can be made from {2,3,4}
Healthy san francisco plan designed : In 2007 San Francisco began its Healthy San Francisco Plan designed to provide health care for all San Francisco citizens.
Draw the initial long run equilibrium using ad-as diagram : Draw the initial long run equilibrium using AD-AS diagram. Now suppose a positive supply shock such as a fall in oil price happens.
Would say pb-j cafe co owes more money : If you're looking at these accounts and these accounts only, would you say PB&J Cafe Co. owes more money than it has, or vice versa? Why?
Explain the financial recognition in the light of ifrs : Explain the financial recognition in the light of IFRS 15? E-Commerce based company running a delivery service business, providing restaurant a delivery service
What is the solution to unemployment in setting : a) Explain and show graphically how unemployment is determined in the Keynesian Theory of Employment stating any assumptions you make.
How noncumulative preferred dividends in arrears : How Noncumulative preferred dividends in arrears? are paid to preferred shareholders if sufficient funds remain after payment of the current preferred dividend.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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