Project #65204 - Macroeconomics Questions. No more than $75

Macroeconomics

 

Aggregate Demand

1. Define aggregate Demand and describe the components that make up aggregate demand. 

2. What part of aggregate demand makes up the largest component of aggregate demand? 

3. What part of aggregate demand do you feel is the most volatile component and relate this to the economy today.

4. Please discuss the factors that cause a shift in aggregate demand and what causes a movement along the curve. Do you see any evidence of this occurring today?

5. Why is the aggregate demand curve negatively sloped? What are two effects that can explain this characteristic?

Government Intervention

It has been stated that the equilibrium level of output is the most important concept in all of economics. The economy is at its best when short run supply (SRAS) and Aggregate Demand intersect at the Long Run Aggregate Supply (LRAS) Curve. Suppose  we are at this point. Now suppose that there is a positive aggregate demand shock that shifts out the aggregate demand curve in the short run.

1. What is the impact on both quantity supplied and Price. 

2. How does the economy adjust back to the long run if the government takes NO corrective action? 

3. What would be the impact if the government does take action to get the economy back to the long run? 

4. Which approach to you prefer and why?

 

Fiscal policy

Fiscal policy is often used by governments to get the economy out of recession or cool the economy down when the economy is overheating. 

1. What is fiscal policy? 

2. How can it be used to get the economy out of recession?

3. How can it be used to get the economy out of the situation where the economy is in an expansionary period where we exceed long run potential? 

4. Do both situations result on different impacts on inflation? Why or why not? 

 

Subject Business
Due By (Pacific Time) 04/08/2015 12:00 am
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