A) Using the AS - AD model illustrate the COVID 19 recessionary gap assuming it was caused by a "supply shock." B) B) Using the AS - AD model illustrate the COVID 19 recessionary gap assuming it was caused by "demand shock."
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- Please note that this is a multi part quesition; thank you so much for your time and effort it means so much to me! Figure 1: Hayek’s (Classical) AD-AS Model (Image normally goes here) Part 1: Why does Hayek’s aggregate supply curve always lead to an equilibrium level of national output equal to the full-employment level of real GDP? Part2: Hayek says that markets will heal themselves and that government should not intervene. How does the AD-AS model reflect Hayek’s idea that governments cannot increase real GDP beyond the level that the free market economy is able to produce? Part 3: Do you believe that the Hayek’s classical AD-AS model explain the factors that cause changes (shifts) in AS realistically? Why or why not?Strikes across a wide range of industries in South Africa in the first half of 2020can be illustrated in the AD‐AS model as a:choose the correct answer(a) Leftward shift of the AD curve; (b) Rightward shift of the AD curve; (c) Leftward shift of the AS curve; (d) Rightward shift of the AS curven the AD-AS model, if there's a sudden increase in consumer confidence leading to more spending, what is the immediate expected impact on the Aggregate Demand (AD) curve? This is a multi answer question. You can select one or more options as the answer. A. The AD curve shifts to the left. B. The AD curve remains unchanged. C. The AD curve shifts to the right. D. The direction of the AD shift is unpredictable
- How does the aggregate demand and supply model reflect a decrease in taxes? Select one: a. Consumption increases, so aggregate demand shifts right. b. Consumption increases, so aggregate supply shifts right. c. Consumption decreases, so aggregate supply shifts left. d. Consumption decreases, so aggregate demand shifts left. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Why does the AD curve slope downward? Why does the AS curve slope upward? How is the AS/AD graph like a standard supply-and-demand dia-gram? How is it diferent?If an economy suffers from a recession induced by weak aggregate supply, the AD-AS model predicts: a. That the economy will selfdom return to the long-term potential level through successive shifts in the SRAS curve to the right, as real wages decrease over time to restore the natural level of unemployment. b. That the economy will selfdom return to the long-term potential level through successive shifts in the SRAS curve to the right, as real wages increase over time to restore the natural level of unemployment. c. That the economy will selfdom return to the long-term potential level through successive shifts in the AD curve to the right, as real wages decrease over time to restore the natural level of unemployment. d. That the economy will selfdom return to the long-term potential level through successive shifts in the SRAS curve to the left, as real wages decrease over time to restore the natural level of unemployment.
- Mexico is experiencing a Recession due to decrease demand. Draw a correcly labeled AS/AD model representing where the economy is relative to the Natural Rate of Unemployment.Describe an economic environment which would be characterized by the term "stagflation". Using an AD - AS diagram, depict and given an example of a macroeconomic shock that would take an economy from a long - run equilibrium to a situation of stagflation. Label all points on the graph completely and point out the key characteristics associated with stagflation on your graph."Tax cuts are more effective in generating the economy when the economy is in recession compared to at full employment." True or False? Show and explain your answer based on the AD-AS model.
- Draw the AS-AD model for the following scenario: The economy is hit by a negative AD shock. Assume there is no monetary or fiscal policy implemented, and the AD shock is permanent. Make sure to include the initial equilibrium, the short-run equilibrium, and the new long-run equilibrium. Label the axes and the curves.In an AD-AS model, one can distinguish between two broad types of macroeconomic policy measures, namely demand-side and supply-side measures. Use the AD-AS model above to explain and illustrate, from a theoretical perspective, that by choosing the right combination of measures (policies) it is possible for the economy to grow without it experiencing inflationary pressures. Which policy combination is critical in ensuring that the price level does not increase?(a) As a response to the recent COVID-19 outbreak, the Commonwealth Government put in place lockdown restrictions. Using the dynamic AD-AS framework, analyse and demonstrate the impact of the COVID-19 pandemic on the level of output (or real GDP), unemployment, and inflation. (b) In response to the COVID-19 pandemic, in March 2020 the Commonwealth Government announced a fiscal stimulus which included income support for workers and businesses hit by the pandemic. Using the same dynamic AD-AS framework used in part (a), explain and illustrate the effect of the fiscal stimulus on the level of output (or real GDP), unemployment, and inflation. (c) Using the same dynamic AD-AS framework used in part (b), show what the impact of the fiscal stimulus would have been if Australia had no interactions in trade or finance with other economies (i.e. if Australia was a closed economy).
