Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I could really use help graphing this and answering the questions. Thank you! a. (0.50 points) Graphically depict the U.S. economy in long-run equilibrium. Label
I could really use help graphing this and answering the questions. Thank you!
a. (0.50 points) Graphically depict the U.S. economy in long-run equilibrium. Label each of the curves (AD,SRAS,LRAS,MS,MD ), and the equilibrium price level, PA, output, YA, quantity of money in the public's hands, MA, and the corresponding purchasing power of money b. (3 points) Say that individuals wish to hold a larger fraction of their real income in the form of money. Graphically depict what happens in the economy using the same graphs as part (a). Clearly label each of the following (if applicable): i. the initial long-run equilibrium, A x. the new curves ADnew,SRASnew,LRASnew,MnewS,MnewD ii. the short-run equilibrium, B iii. the short-run equilibrium price level, PB iv. the short-run equilibrium level of output, YB v. the new long-run equilibrium, C vi. the new long-run equilibrium price level, PC, and purchasing power of money vii. the new long-run equilibrium level of output, YC viii. the new long-run equilibrium quantity of money in the public's hands, MC c. ( 0.30 points) What happens to the overall price level, output, and unemployment during the short-run fluctuation in output? d. ( 0.20 points) What part of a business cycle does the fluctuation from equilibrium A to B reflect? e. ( 0.50 points) List three monetary policies that the Fed could implement to prevent this fluctuation. f. (0.50 points) List two fiscal policies that the government could implement to prevent this fluctuationStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started