help with assignment please
1. Using the diagram on the right with AD' Price level measured by price index determine the following a. equilibrium price level = b. equilibrium real GDP produced (Y) = c. unemployment rate equals the natural rate 1.10 because Y = $20 Trillion = (LRAS) 1.07 2. If Aggregate Demand falls to ADI 1.04 a. temporary new price level = b. temporary real GDP produced = ADI c. unemployment rate is greater than natural rate because Y= $20 Trillion ((LRAS) d. Assuming the Government ignores the existence $19 T $20 T I is an abbreviation for trillions of the Recession and high unemployment rates and laborers aggregate output measured by real GDP compete for existing jobs by agreeing to work for lower Money Wages: explain the effect on (1) SRAS: As Money Wages decrease, all firms' unit costs of producing decreases and the SRAS curve shift to the right until it intersects the Aggregate Demand Curve and Long Run Aggregate Supply curve (2) Price level: As SRAS shifts to the right firm compete for more customers by lowering prices driving the Price Levels down (deflation) to (3) Real GDP produced: As firms lower prices lowering price levels, real GDP demanded rises to (4) Causing the unemployment rate to the natural rate 3. Now, the believers in Keynesian Theory, would advocate the following Fiscal Policy solution to the recession 3. in Government Spending, because the in Government Spending would hopefully shift the Aggregate Demand curve to AD'Money Wages: explain the effect on (1) SRAS: As Money Wages decrease, all firms' unit costs of producing decreases and the SRAS curve shift to the right until it intersects the Aggregate Demand Curve and Long Run Aggregate Supply curve (2) Price level: As SRAS shifts to the right firm compete for more customers by lowering prices driving the Price Levels down (deflation) to (3) Real GDP produced: As firms lower prices lowering price levels, real GDP demanded rises to (4) Causing the unemployment rate to the natural rate 3. Now, the believers in Keynesian Theory, would advocate the following Fiscal Policy solution to the recession 3. in Government Spending, because the in Government Spending would hopefully shift the Aggregate Demand curve to AD" b. Government Taxes because the in Government Taxes would hopefully and therefore 4. Now the believers in Monetary Policy, would advocate the following as a solution to the recessionary problem a. An in the size of the nation's Money Supply because an in the Money Supply would hopefully shift the Aggregate Demand curve to AD' b. a in the interest rate, because the decrease in the interest rate would Investments and Net Exports, which in turn hopefully shift the Aggregate Demand curve to AD' Note: Both Fiscal Policy and Monetary Policy as solution to the recession ultimately involves back to
