Compute the price level and real gdp

Reference no: EM13178554

Suppose that the equation for the aggregate demand is y= 7,000 + 2,400/p. in this real business cycle model, the equation for natural real GDP is Yn = 9,000 + technology shock. The technology shocks for periods 1-6 are given below.

Period: 1 2 3 4 5 6

Technology shock: -400 -80 0 1,000 400 0

A. Calculate the points on the aggregate demand curve when the price level equals 0.75, 0.80, 1.00, 1.20, 1.25, and 1.50.

B. Compute the price level and real GDP in periods 1-6. Describe the cyclical behavior of real GDP and the price level in this real business cycle model.

Reference no: EM13178554

Questions Cloud

Discuss several economic events : Explain the predicted impact, other things equal, on the terms of trade of developing countries of relatively slow growth in demand for developing countries goods by developed countries combined with relatively rapid growth in demand by developing..

Compute the values of e for the cell : Calculate the values of E for the cell when the following volumes of the Cu titrant have been added: (Activity coefficients may be ignored as they tend to cancel when calculating concentration ratios.

Puerto rico home of the largest concentration : Why is Puerto Rico home of the largest concentration of U.S. military forces in Latin America?

Mcad deficiency will experience life-threatening symptoms : while a person with inherited MCAD deficiency will experience life-threatening symptoms (lack of energy and coma) after about a day of fasting

Compute the price level and real gdp : Calculate the points on the aggregate demand curve when the price level equals 0.75, 0.80, 1.00, 1.20, 1.25, and 1.50. Compute the price level and real GDP in periods 1-6. Describe the cyclical behavior of real ..

Puerto ricans slighted : What do you think, are Puerto Ricans "slighted"? They get SOME of the benefits (and much of the responsibility!) but aren't allowed the right to vote in the final presidential election...

Constantly fires thrusters on her space suit : When an astronaut goes on a space walk outside the Space Station, she will quickly float away from the station unless she has a tether holding her to the station or constantly fires thrusters on her space suit?

What is the value of net exports : Assume that gross private domestic investment is $800 billion and the government (state, local, and federal combined) is currently running a $400 billion deficit. If households and businesses are saving $1,000 billion, what is the value of net exp..

Jean piaget categorize the moral reasoning-respectively : Jerome and Hani got up early on Saturday morning and decided to make breakfast in bed for their mother. While reaching for the bed tray in the back of the hall cabinet, they accidentally bumped and broke one of their mothers favorite porcelain dolls.

User Account

All Pages