Question 3 Explain the effects of the following events on Aggregate Demand or Aggregate Supply curves...

 

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Question 3 Explain the effects of the following events on Aggregate Demand or Aggregate Supply curves (AD/ SAS decreases or increases) Specify the shift in AD/SAS curve and indicate what happens to the equilibrium price level and RGDP a. A significant appreciation of the exchange rate b. Investment increases after the Government decided to remove many business barriers c. Households expect lower prices in the future d. High temperatures in most KSA cities supplying oil Price level (GDP deflator, 2000-100) LRAS SPAS, SRAS AD₂ Real GDP (trillions of 2000 dollars) Question 4 Refer to the below figure to answer the following, questions. a. Name points in the above graph that are pos ible long-run equilibrium. b. Name two points in the above graph that are possible short-run equilibrium but not long-run equilibrium. Assume that YI represents potential GDP c. Suppose the economy is at point A. If investment spending increases in the economy, where will the eventual long-run equilibrium be? d. Suppose the economy is at point C. If government spending decreases in the economy, where will the eventual long-run equilibrium be? Question 5 a. Name two factors affecting the Lebanese Aggregate Demand (AD) curve. In each case draw a graph to illustrate your answer b. Name two factors affecting the Lebanese Short run Aggregate Supply (SARS) curve. In each case draw a graph to illustrate your answer Question 3 Explain the effects of the following events on Aggregate Demand or Aggregate Supply curves (AD/ SAS decreases or increases) Specify the shift in AD/SAS curve and indicate what happens to the equilibrium price level and RGDP a. A significant appreciation of the exchange rate b. Investment increases after the Government decided to remove many business barriers c. Households expect lower prices in the future d. High temperatures in most KSA cities supplying oil Price level (GDP deflator, 2000-100) LRAS SPAS, SRAS AD₂ Real GDP (trillions of 2000 dollars) Question 4 Refer to the below figure to answer the following, questions. a. Name points in the above graph that are pos ible long-run equilibrium. b. Name two points in the above graph that are possible short-run equilibrium but not long-run equilibrium. Assume that YI represents potential GDP c. Suppose the economy is at point A. If investment spending increases in the economy, where will the eventual long-run equilibrium be? d. Suppose the economy is at point C. If government spending decreases in the economy, where will the eventual long-run equilibrium be? Question 5 a. Name two factors affecting the Lebanese Aggregate Demand (AD) curve. In each case draw a graph to illustrate your answer b. Name two factors affecting the Lebanese Short run Aggregate Supply (SARS) curve. In each case draw a graph to illustrate your answer

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a Disposable income decreases Fall in disposable income leads to ri... View the full answer