Question

2. Would your answers in the last two columns of the above table change if the AS curve considered was the Keynesian typer The classical type? How? Illustrate graphically. 3 Consider the intermediate AS curve. Indicate the separate effects of each of the following on the intermediate AS curve. Indicate whether the AS curve shifts or remains stationary: and if it shifts, indicate in what direction it shifts and then graphically illustrate the effect of each of the events on the equilibrium price and real GDP (using the ADIAS model and assuming an intermediate AS curve). Events If yes, in what direction? Does the AS curve shift? Graphical Illustration (be sure to label the axes and graphs and to indicate initial and new equilibrium points) The prices of raw materials increase significantly Nominal wages decrease substantially. Labor productivity decreases Technological advance occurs The labor force decreases The average price level (of goods and services) decreases

Answer 1

Date ES Paye [STUDY BUDDAF pnce of Raus Material imetass Jeads to imereasem Crst and leadls to l m As aud porice df ED t3creases Shita drectio AD out put wpuarcd but mereare ineupply yes Shof fo Eo ET As crilios Trakeus ubuwara bud dereaseincpjaly tes but do dret piucand beut ro mcresse m & Q

Date Page STUDY BUDDIES upward but As falls Shift yes Shifts woward beut Asinerease duets proces falls वरी। Go C, ebut