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Nostrana [21]
2 years ago
15

The aggregate demand aggregate supply mode is quite useful tool for us to understand the economy. So far, we saw only one change

at a time, however, in reality, there can be multiple shocks at the same time. The economy was in long run equilibrium. Assuming all else equal, world scientists collaborated to invent a vaccine for everyone to be safe from deadly virus, raising productivity. This makes consumers and businesses optimist about the economy. At the same time, commodity market, namely oil market is calm, maintaining a stable supply.
1. Given above scenario, what do you think will happen to the LRAS, SRAS and AD curves in each in short run?
2. And what would happen to price level and output in the economy?
3. What about in long run?
Business
1 answer:
timurjin [86]2 years ago
8 0

Answer:

Explained below

Explanation:

1) From the question, we can deduce that in the short run, there will likely be news of the discovery/invention of a super vaccine which will make the consumers and the businesses to be optimistic about the future of the economy. Therefore, this will in turn lead to an increase in consumption by consumers and thus also lead to an producers making an increase in investment.

2) From answer 1 above, since there is an increase in consumption as well as investment, this will in turn also lead to an increase in the aggregate demand of the economy. Whereas, we are told that the oil market is calm and therefore we can say it does not have an effect on the supply curve.

From the first image attached, increase in the aggregate demand led to an increase in price level from point P to P1 on the y-axis while output output level increased from point Y to point Y1 on the x-axis.

3) In the long run, due to the increase in demand in the short run that makes the supply curve shift to its right, it means the producers will have more of the goods produced. This will in turn reduce the price to its initial level and also increase the output level. From the second diagram, this will lead to a shift long run aggregate supply from LRAS to LRAS1 on the x-axis.

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Suppose that the country of Libraria made a concerted effort to increase the educational level of its people. If this effort had
tatuchka [14]

Answer:

If this effort had no effect on the wages of its workers, one might consider this as evidence in support of:

d. neither the human-capital nor the signaling view of education.

Explanation:

The human capital view of education argues that education increases workers' productivity, which also affects some increase in workers' wages.  The signaling view states that education passes a message about workers' various innate abilities to potential employers. This implies that the focus of the signaling view or theory is not the effect of education on the students but the message communicated in the labor market.

6 0
2 years ago
Greer Manufacturing purchases property that includes land, buildings and equipment for $4.7 million. The company pays $185,000 i
nekit [7.7K]

Answer:

Explanation:

The journal entry is shown below:

Land A/c Dr $1,459,920

Equipment A/c Dr $2,085,600

Building A/c Dr $1,668,480

          To Cash A/c $2,607,000         ($5,214,000 × 50%)

           To Notes payable A/c  $2,607,000       ($5,214,000 × 50%)

(Being purchase of property is recorded)

The total property cost would be

= $4,700,000 + $185,000 + $218,000 + $111,000

= $5,214,000

Estimated value of land = $5,214,000 × 28% = $1,459,920

Estimated value of building = $5,214,000 × 40% = $2,085,600

Estimated value of equipment = $5,214,000 × 32% = $1,668,480

6 0
3 years ago
As a result of a major hurricane, James' property experienced heavy flooding. His home was in a specialized flood hazard area. W
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National Flood Insurance will allow James to recoup part of his losses.

The NFIP presently owes $20.525 billion to the U.S. Treasury, leaving $9.nine billion in borrowing authority from a $30.425 billion restriction in law. This debt is serviced by using the NFIP and hobby is paid through top rate revenues.

According to the NFIP, the following varieties of harm aren't blanketed via flood coverage: damage resulting from moisture, mold, or mold that would have been avoided by the assets proprietor or which isn't always due to the flood. Harm resulting from earth motion, although the earth movement is because of the flood.

The NFIP gives flood coverage to asset proprietors, renters, and organizations, and having this insurance enables them to get better faster whilst floodwaters recede. The NFIP works with communities required to adopt and implement floodplain management regulations that help mitigate flooding effects.

Learn more about Insurance here brainly.com/question/25855858

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7 0
2 years ago
For each of the following pairs of firms, explain which firm would be more likely to engage in advertising.
lions [1.4K]

Answer:

The correct answers are:

a) Family owned restaurant

b) A manufacturer of cars

c) A company that invented a very comfortable razor

Explanation:

First of all, the family who owned a restaurant will be the one that would most likely engaged in advertising due to the fact that they provide a service that has to be known for the people of the community around the place and all the tourists that go that area, meanwhile the other familiy would obviously just sell its products to the better buyer that they could find.

Secondly, the manufacturer of cars would be the one that most likely engaged in advertising due to the fact that they found themselfs in a very competitive and oligopoly market that is the car market and therefore that they highly need to stand out their making them better than the ones from the competitors.

Finally, the company who invented a very comfortable razor would be the one who engaged more in advertising due to the fact that they known they have a better product that the rest of the competitors so they need to take advantage of that and make sure that the consumers know about it and with that they would sell more and therefore invest more in advertising as well.

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3 years ago
Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false
lawyer [7]

Answer:

  1. True
  2. False
  3. True
  4. True

Explanation:

When an economy has a strong balance sheet and a declining budget deficit, it means that there is less need to borrow from the market which would keep rates lower.

When the economy is weakening, the Fed will try to stimulate it by engaging in actions that weaken short term interest rates so that people and businesses can borrow at lower cost and invest or buy goods and services.

When investors are worried about the riskiness of other financial assets, they usually come to safer assets like U.S. Treasury bonds so that they do not lose money and this is what happened in the credit crisis of 2008. More demand for the bonds led to a rise in their price.

3 0
2 years ago
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