Explain how the aggregate demand and aggregate supply

Assignment Help Macroeconomics
Reference no: EM132506759

The low-price fashion chain Forever 21 has reached a decision to discontinue operations in Canada. The retailer operates 44 stores in Canada and employs about 2,000 people. Using appropriate diagrams, explain the following.

(a) Is there a trade-off between the unemployment rate and the inflation rate in the short run? How can the Phillips curve be used to answer this question?

(b) Explain how the aggregate demand and aggregate supply impact the Phillips curve.

(c) If the unemployment rate and inflation are both rising, can this be explained by a movement along a given Phillips curve? What must be happening to aggregate demand and aggregate supply? What must be happening to the Phillips curve?

(d) If the Bank of Canada continues to take expansionary monetary policy, how will the unemployment rate and inflation be affected? (Use both Phillips curve and AS-AD graphs in your explanation.)

(e) Is there a trade-off between the unemployment rate and inflation in the long run? How is the long run aggregate supply curve related to the long run Phillips curve?

Reference no: EM132506759

Questions Cloud

Calculate the project-specific benchmarks for each project : Calculate the project-specific benchmarks for each project. An all-equity firm is considering the projects shown below. The T-bill rate is 4 percent
Describe the use of fossil fuels : Our planet is experiencing an increase in Desertification. This is happening because of our planet's growing population and use of fossil fuels.
Demand for currency-demand for checkable deposits : Assuming that Md=$Y(.85 - 3i) and income is $70Billion, the people hold 35% in currency, the reserve ratio is 12% and the monetary base = 15Million.
How much of each type of ice-cream should the company : How much of each type of ice-cream should the company produce to maximise revenue? A company manufactures two kinds of ice-cream.
Explain how the aggregate demand and aggregate supply : Explain how the aggregate demand and aggregate supply impact the Phillips curve.
Briefly explain different functions of taxation : Question - With reference to relevant legislation, case law and secondary sources, briefly explain different functions of taxation
Problem-monetary approach : Suppose Argentina has a growth rate in output (Y) that is higher than the U.S. Use the monetary approach equation to explain whether this creates a problem
Find the amount in the investment fund is : The investment will earn 6% for 5 years, with no funds withdrawn. In 5 years, the amount in the investment fund is ((Rounded your answer to nearest €))
How your research of the topic has influenced your views : Conclude your paper with a reflection of why you chose this particular Lot in Life to study and how your research of the topic has influenced your views.

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!

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