answer question 1+2
Directions: (note that this assignment works differently than the last one). . Assume that the economy starts at Point A in the diagram below. . Answer the following questions. Showing Shifts in Short Run Aggregate Supply General Inward shift from Price Level AS1 to AS2 is AS2 AS1 AS3 decrease in AS D A C P 1 Outward shift from B AS1 to AS3 is increase in AS Y2 Y1 Y3 Real GDP MacBook Pro K Q % * W # AY2 Y1 Y3 Real GDP D Question 1 5 pts In a few words, describe 3 separate "real world" events that could cause AS to increase (shift right, to Point C). These can be real or make-believe. No explanation is needed. Fill in space provided, with 3 separate items numbered or with bullets. (Hint: Pretend you're an economic journalist writing a news headline, like "Businesses shut down due to pandemic". Feel free to get creative! (No, you can't use mine again!) Edit View Insert Format Tools Table 12pt Paragraph B I U A & T? : MacBook Pro Q C+ Acases tile skills of the laborers p 198 words Question 2 5 pt In a few words, describe 3 separate "real world" events that could cause AS to decrease (shift left, to Point D). Fill in space provided, with separate items numbered or with bullets. Edit View Insert Format Tools Table 12pt Paragraph B I U A & T V | :How do real-world events affect the economy? After looking at aggregate demand in the last assignment, we will now look at factors that affect production, or Aggregate Supply. Aggregate Supply (AS) is the total supply of all goods and services from producers, both private and public (businesses and government). You should recall the micro concepts of changes in supply (shift of curve due to a change in non-price determinants) versus changes in quantity supplied (movement along a curve, due to changes in price). You guessed it, those same concepts apply to Aggregate Supply. Shifts in Aggregate Supply (AS) represent increases or decreases in the economy's capacity (potential) to produce goods and services. For example, an increase in the economy's capacity to produce can be caused by an increase in the quantity or quality (ie. productivity) of resources/factors of production; . more labor, or higher skilled labor more capital (plant, machinery, equipment, transportation, energy, and communications infrastructure, etc.) better technology more natural resources, or higher quality resources (like clean water) lower costs of production for all firms because of lower natural resource costs, lower labor costs, lower costs of capital, or increasing productivity. Do you also remember the non-price determinants of supply? (Cost of inputs and resources, Prices of other goods that could be supplied, Expectations, Number of producers, Technology, Taxes, and "Temperature"/weather/disasters (aka "the 3 T's"). Well, when it comes to aggregate supply, some of those determinants can have huge impacts on the macroeconomy. With that as a preface, let's get going! Directions: (note that this assignment works differently than the last one). . Assume that the economy starts at Point A in the diagram below. . Answer the following questions. MacBook Pro Q @ # $ % A 2 W 4 5 8 9 O W E R Y U O P S D F G H K
