In each of the following short-run cases, specify whether the events cause a shift of a...

 

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In each of the following short-run cases, specify whether the events cause a shift of a curve or a movement along a curve. Determine which curve(s) and the direction(s) of the change and show the new curve with a different color. Do not remove the original curves!) (3 points; 0.6 points per question) A series of investment banks, such as Lehman Brothers and Bear Sterns go bankrupt so that investment, firms purchases of newly produced capital goods, part of AD = C +I+G+ (X-M) decreases. We have two effects here (a lower future capital stock and a decrease in investment). Show both (Show shift of curve and color the line shifted.) (- P LRASO Y* ADO AD, Y=real GDP In each of the following short-run cases, specify whether the events cause a shift of a curve or a movement along a curve. Determine which curve(s) and the direction(s) of the change and show the new curve with a different color. Do not remove the original curves!) (3 points; 0.6 points per question) A series of investment banks, such as Lehman Brothers and Bear Sterns go bankrupt so that investment, firms purchases of newly produced capital goods, part of AD = C +I+G+ (X-M) decreases. We have two effects here (a lower future capital stock and a decrease in investment). Show both (Show shift of curve and color the line shifted.) (- P LRASO Y* ADO AD, Y=real GDP

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