4.(1) lessmorethis new rounded price level and using the formula for the AD curve, the new equilibrium GDP level can be found to be$. (Round your response to the nearest whole number.) f.Returning to the original demand curve and recognizing its downsloping shape, determine the effect of a $1 increase in Poilon equilibrium GDP and the price level. The new equilibrium price level is $. (Round your response to two decimal places.)Using this new rounded price level and using the formula for the AD curve, the new equilibrium GDP level can be found to be $. (Round your response to the nearest whole number.)When the aggregate demand is downsloping, the multiplier effect of a change in the price of oil is (1) than it would be if the aggregate demand was horizontal. 6644The economy of Southland is currently in a macroeconomic equilibrium depicted by point E0on the graph to the right.Suppose that the level of expenditures increases by $500 and the multiplier is 2. The multiplier is different from the simple multiplier, which assumes a horizontal AS curve. 1.) Use the three-point curve drawing toolto draw and label a new AD curve that shows this AD shock. Use the multiplier of 2 to calculate the exact location of the new AD curve. 2.)Use the point plotting toolto plot and label the new equilibrium point, following the change in the autonomous expenditures. Carefully follow the instructions above, and only draw the required object. Now suppose that Southland's economy is characterized by a horizontal AS curve. In this case, the value of the multiplier will now be Consequently, the increase in the level of expenditures would have resulted in a change in the equilibrium level of output. 02,0004,0006,0008,00010,00004008001,2001,6002,000 Real GDP (Y) Price Level (P)Economy of Southland AS 0 AD 0 E 0 AD 1 E 1
2/9/2018 Lecture 9 Homework-Joshua Xavier 4/7 5. 6. 7.The economy of Ashville is currently in a macroeconomic equilibrium, as depicted by point E0in the accompanying figure. The main component of Ashville's exports consist of the raw materials that it derives from its natural resources. Suppose that the world demand for raw materials sharply, resulting in in the price of raw materials throughout the world.
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- Spring '17
- Supply And Demand, price level