The economy of China is currently in a deflationary period caused by a problems in the...
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The economy of China is currently in a deflationary period caused by a problems in the real estate market. The Chinese economy has long-run aggregate supply curve =A+R with A=4,K=7 The money supply is growing at a rate of 10 percent per year. The velocity of money is v=5c+47 +2+NX The problems began when several real estate firms, most notably Evergrande, began defaulting on their debts and seemed likely to go bankrupt without ever building homes that millions of households had already paid for. Because of these problems. consumption growth is C = -2. Meanwhile, I = G = NX = 0 The deflationary period has been continuing for some time (meaning the economy is in long-run equilibrium). In the hopes of reversing the situation, the government of China begins fiscal stimulus. During the period of fiscal stimulus, the growth rate of government spending rises to G = 5. Draw a dynamic AD-AS graph of the Chinese economy: Draw the state of the aggregate economy before and during the fiscal stimulus begins on the same set of axis. Use arrows to show the shift in any curve. Your graph should show the pre-stimulus long run equilibrium, and the situation immediately after the stimulus begins (before expectations adjust) Make sure to graph all three curves (AD, LRAS, SRAS) begins (be expectations adjust) Make sure to graph all three curves (AD, LRAS, SRAS) Label all curves with the equation being graphed (meaning the actual mathematical expression) .Label all vertical intercepts Solve for the equilibrium rate of inflation and GDP growth before and during the fiscal stimulus, and make sure to label them on the relevant axes Label all axes You must draw your graph in Google Docs, export it as a png file, and upload it in the upload question below. You can enter 0 in the answer box for this question, or simply ignore it. The economy of China is currently in a deflationary period caused by a problems in the real estate market. The Chinese economy has long-run aggregate supply curve =A+R with A=4,K=7 The money supply is growing at a rate of 10 percent per year. The velocity of money is v=5c+47 +2+NX The problems began when several real estate firms, most notably Evergrande, began defaulting on their debts and seemed likely to go bankrupt without ever building homes that millions of households had already paid for. Because of these problems. consumption growth is C = -2. Meanwhile, I = G = NX = 0 The deflationary period has been continuing for some time (meaning the economy is in long-run equilibrium). In the hopes of reversing the situation, the government of China begins fiscal stimulus. During the period of fiscal stimulus, the growth rate of government spending rises to G = 5. Draw a dynamic AD-AS graph of the Chinese economy: Draw the state of the aggregate economy before and during the fiscal stimulus begins on the same set of axis. Use arrows to show the shift in any curve. Your graph should show the pre-stimulus long run equilibrium, and the situation immediately after the stimulus begins (before expectations adjust) Make sure to graph all three curves (AD, LRAS, SRAS) begins (be expectations adjust) Make sure to graph all three curves (AD, LRAS, SRAS) Label all curves with the equation being graphed (meaning the actual mathematical expression) .Label all vertical intercepts Solve for the equilibrium rate of inflation and GDP growth before and during the fiscal stimulus, and make sure to label them on the relevant axes Label all axes You must draw your graph in Google Docs, export it as a png file, and upload it in the upload question below. You can enter 0 in the answer box for this question, or simply ignore it.
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