As-ad model with inflation, Macroeconomics

Assignment Help:

Q. AS-AD model with inflation?

When we have inflation, both AD curve and AS curve will be gliding. 'The glide rate' of the AD curve is given by ΠMwhereas it is ΠWthat applies to AS curve (where both rates are exogenous). Using AS-AD curves, we can figure out the equilibrium price P (and thus p) at any point in time and we can conclude all endogenous variables. For illustration, we realize that if ΠM = Πw, both curves glide at exactly the same rate. Y would then be unchanged and p will be equal to Πw

Figure: Determination of Y and P in the AS-AD model with inflation

2062_AS-AD model with inflation.png


Related Discussions:- As-ad model with inflation

Compute the npv-the irr the mirr, Suppose a company is considering two inde...

Suppose a company is considering two independent projects, Project A and Project B.  The cash outlay for Project A is $14,000. The cash outlay for Project B is $20,000. The company

Stimulate aggregate demand, The graph shows that if policymakers respond im...

The graph shows that if policymakers respond immediately to an oil price shock by stimulating aggregate demand, shifting AD to AD* then the level of output will remain constant. Th

Revenue theory, calculate, a.the total revenue b.the average revenue c.the ...

calculate, a.the total revenue b.the average revenue c.the marginal revenue price 5 4 3 2 1 0 quantity 0 1 2 3 4 5.

Perfectly competitive firm, Consider the following demand schedule. Does it...

Consider the following demand schedule. Does it apply to a perfectly competitive firm? Compute marginal and average revenue Price Quantity Price Quantity $95 2 $55 5 $88 3 $40 6 $

Explain between perfect competition and monopoly market, "No point is bette...

"No point is better accepted than the fact that the monopoly price is higher and the output smaller than what is socially ideal. The public is the victim." (a) Explain between

Incentives, Incentives Incentives designed to increase effort, reward e...

Incentives Incentives designed to increase effort, reward enterprise and encourage saving and investment include: an emphasis on the effect of a reduction in the margi

Explain growth theory, Q. Explain Growth theory? The purpose of this to...

Q. Explain Growth theory? The purpose of this topic is to try to explain growth in GDP. The models in this topic are very different from the rest of the models as they use only

Quality of health care, Explain how changes in the quality of health care w...

Explain how changes in the quality of health care will influence the demand for care.

Example of indirect taxes and subsidies- accounting system, Example of Indi...

Example of Indirect Taxes and Subsidies- ACCOUNTING SYSTEM   We now permit our government to impose what are called indirect taxes. This category includes sales tax, excise tax,

Calculate the demand and probability, Sally's Silk Screning produces specia...

Sally's Silk Screning produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming event. During the event its

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