Equilibrium 19931767
Assume that the long-run aggregate supply curve is vertical at Y = 3,000 while the short-run aggregate supply curve is horizontal at P = 1.0. The aggregate demand curve is Y = 3(M/P) and M = 1,000.
a.If the economy is initially in long-run equilibrium, what are the values of P and Y?Illustrate your answers in a diagram.
Save your time - order a paper!
Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines
Order Paper Nowb. Now suppose a supply shock moves the short-run aggregate supply curve to P = 1.5. What are the new short-run P and Y? I llustrate your answers in a diagram?
c. If the aggregate demand curve and long-run aggregate supply curve are unchanged, what are the long-run equilibrium P and Y after the supply shock? I llustrate your answers in a diagram?
d. Suppose that after the supply shock the central bank wanted to hold output at its long-run level. What level of M would be required? If this level of M were maintained, what would be long-run equilibrium P and Y? I llustrate your answers in a diagram?
The post Equilibrium 19931767 appeared first on nursingessayswriters.com.
“Are you looking for this answer? We can Help click Order Now”
