Reference no: EM13176054
You are given the following equation for the aggregate demand (AD) and short-run aggregate supply (SAS) curve: AD: Y = 1.25Ap + 2.5M/P SAS: Y = 11,250 - 20W + 1,000P
Where Y is real GDP, Ap is the amount of autonomous planned spending that is independent of the interest rate, M? is the nominal money supply, P is the price level, and W is the nominal wage rate. Assume that Ap equals 5,000, M? equals 2,000, W equals 50, and natural real GDP, Y?, equals 11,250.
A. Use the values for the autonomous planned spending that is independent of the interest rate and nominal money supply to derive the equation for the aggregate demand curve. Compute the amount of aggregate demand when the price level equals 2.0, 1.25, 1.0, 0.8, and 0.5. graph the aggregate demand curve
B. Derive the equation for the sort-run aggregate supply curve, given that the nominal wage rate equals 50. Compute the amount of short-run aggregate supply when the price level equals 2.0, 1.25, 1.0, 0.8, and 0.5. graph the short-run aggregate supply curve.
C. Given your answers to parts a and b, explain what the shot-run and long-run equilibrium levels of real GDP and the price level are.
D. Given your answers to part c, explain what the equilibrium real wage rate is.
E. Suppose the autonomous planned spending increases by 800 billion so that A?p = 5,800. Explain if this increase is the result of increases willingness of financial market firms to lend to consumers and business firms or a collapse in the housing market, which reduces household wealth and housing construction. Derive the new equation for the aggregate demand curve. Compute the new amount of aggregate demand when the price level equals 2.0, 1.25, 1.0, 0.8, and 0.5. graph the new aggregate demand curve.
|
What is the initial mass of moisture in the moist grain
: 1500kg of moist grain was dried from an initial moisture content of 26.7kg on wet basis to a final mass of 1250kg .What is the initial mass of moisture in the moist grain.?
|
|
How many feet of deck does this imply
: What's commonly used is a steam-driven catapult. Large pistons move within their cylinders, driven by steam pressure at one end, and tow the jet forward. Assume that the jet is brought from a stationary state to 159 mph in 2.15 seconds and that the..
|
|
State the electron transport chain complexes
: The electron transport chain complexes that have higher electron affinities steal electrons from those with lower electron affinities.
|
|
What is the formula for calcium oxalate dihydrate
: what is the formula for calcium oxalate dihydrate when 100 degree Celsius heat is added?
|
|
What are the shot-run and long-run equilibrium levels
: Suppose the autonomous planned spending increases by 800 billion so that A?p = 5,800. Explain if this increase is the result of increases willingness of financial market firms to lend to consumers and business firms ..
|
|
Group polarization-deindividuation
: Carol is restless during class because her professor's distressed facial expressions lead her to believe that he dislikes teaching. The professor, on the other hand, is distressed because he sees Carol's restlessness as an indication that she lacks a..
|
|
Blood alcohol concentration level
: A blood alcohol concentration (BAC) of 0.05 percent or higher is sufficient to impair judgment and reflexes. About how much would an average 160-pound person drink in an hour to reach this BAC level?
|
|
Find the price of gasoline
: for every penny that the price of gasoline goes up the U.S. postal service experiance a monthly fuel cost increase of $8 million. State what assumptions you need to make to answer this question
|
|
Evaluate the overall phase of pre-proposal activities
: Evaluate the overall phase of pre-proposal activities and make at least one recommendation for improving the phase. Provide specific examples that illustrate how your recommendation would help.
|