Economics Homework: Business Cycles, Aggregate Demand, and Supply, Assignments of Economics

Download Economics Homework: Business Cycles, Aggregate Demand, and Supply and more Assignments Economics in PDF only on Docsity! Homework 9-10 (Chapters 9, 10) Chapter 9 Questions 1. Define and apply the following key terms/concepts: a. Business cycles. b. Leading economic indicators c. Short run and long run d. Aggregate demand (AD) and AD curve e. Short run aggregate supply and short aggregate supply curve f. Long run aggregate supply and long run aggregate supply curve g. Shocks h. Stabilization policy i. Accommodation by the Fed. 2. What is the difference between short and long run? 3. Explain how the quantity equation can be interpreted as an equation of the aggregate demand curve. 4. Draw an AD curve 5. What factors cause the AD curve to increase (shift right)? 6. What factors cause the AD curve to decrease (shift left)? 7. Determine the effects of the reduction of the money supply on the AD curve 8. Draw a long run aggregate supply curve (LRAS) and explain its slope. 9. Draw a short run aggregate supply curve (SRAS) and explain its slope. 10. Graphically and in words, describe the long equilibrium condition using the AD curve, the SRAS curve and the LRAS curve 11. Illustrate the effects of an increase in aggregate demand on the price level and the aggregate output in the sort run and in the long run. 12. Illustrate the effects of an adverse supply shock on the equilibrium the price level and the aggregate output in the sort run and in the long run. 13. How does the Fed accommodate the impact of an adverse supply shock? 14. Illustrate the impact of the accommodation. Chapter 10 Questions 1. Define and apply the following key terms/concepts: a. aggregate demand b. Keynesian cross c. Planned expenditure d. consumption function e. disposable income f. Marginal propensity to consume g. fixed investment h. government spending i. government-purchases multiplier j. tax multiplier k. inventory investment