tuto5 q5 - DATE 23 OCTOBER 2014 TUTORIAL QUESTION QUESTION...

Info icon This preview shows pages 1–2. Sign up to view the full content.

DATE : 23 OCTOBER 2014 TUTORIAL QUESTION : QUESTION 5 GROUP MEMBERS : 1. Gwee Shei Tian 2. Ginny Tey Chiu Jin 3. Chong Jia Hui 4. Lim Chin Da 5. Khoo Wei Eng 5. (a) Using the aggregate demand and short-run aggregate supply (AD-SRAS) diagrams, explain the impacts on the equilibrium price level and Real GDP when each of the followings events occurs: (i) An increase in wage rates due to the implementation of minimum wage policy. (ii) Petronas discovers new oil reserves in Pahang. (iii) An increase in the personal income tax rates for all individuals. ANS : i. Increase in wage rate, higher cost of production at constant prices.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Short-Run Aggregate Supply curve shift to the left. Equilibrium price level increase, Real GDP decrease. ii. Petronas discovers new oil reserves, increase in beneficial supply shock. Short-Run Aggregate Supply curve shift to right. Equilibrium price level decrease, Real GDP increase. iii. Increase in the personal income tax rates, disposable income decrease, consumption decrease. Aggregate demand curve shift to the left. Equilibrium price level decrease, Real GDP decrease....
View Full Document

  • Spring '15
  • No
  • Supply And Demand, Oil reserves, Personal income tax, equilibrium price level, PETRONAS, Ginny Tey Chiu Jin

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern