17 Jul Aggregate Demand and Aggregate Supply? General Instructions: Download your assignment template document from Course Documents. You will find this in the ‘Course Resources’ modu
Aggregate Demand and Aggregate Supply
General Instructions:
- Download your assignment template document from Course Documents. You will find this in the "Course Resources" module in the left navigation area which is located under your Digital Book. Select the “Load More” button at the bottom of the list to view all the available documents. Look for the document entitled: Unit 6 Assignment Template.
- Unless specified differently by your course instructor, save this assignment template to your computer with the following file naming format: Course number_section number_last name_first name_unit number
- At the top of the template, insert the appropriate information: Your name, course number and section, and the date.
- Insert your answers in the appropriate space provided for the question. Your answers should:
- follow current APA format with citations to your sources,
- include a list of references at the bottom of your last page,
- be in Standard English with correct spelling, punctuation, grammar, and style,
- be double-spaced,
- be formatted in Times New Roman,12-point, black font, and
- respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions.
UNIT 6 – BU204 – MACROECONOMICS 1
Unit 6 Assignment Template: Aggregate Demand and Aggregate Supply
Name: ______________
BU204 Section Number: ______
Date: ______________
General Instructions for all Assignments
1. Unless specified differently by your course instructor, save this assignment template to your computer with the following file naming format:
Course number_section number_Last name_First name_Unit number.
Example: BU204_Section02_David_Alex_Unit1
2. At the top of the template, insert: Your Name, Course Number and Section (BU204 – Section 0x), and the Date.
3. Insert your answers below each question or in the appropriate space provided for in the question. Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions.
4. Your answers should
a. follow current APA format with citations to your sources,
b. include a list of references at the bottom of your last page,
c. be in Standard English with correct spelling, punctuation, grammar, and style,
d. be double-spaced,
e. be formatted in Times New Roman,12-point, black font, and
f. respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions.
5. Upload the completed assignment to the appropriate unit Dropbox.
6. Direct any questions about the assignment to your course instructor.
Assignment
This assignment addresses the market for loanable funds, marginal propensity to consume, the multiplier effect, aggregate supply (AS), aggregate demand (AD), and the basic concepts of open-economy macroeconomics
This assignment assesses your knowledge on the following Course Outcome:
BU204-1: Examine how consumer spending, savings, investment spending, and other factors contribute to long-run economic growth.
1. A business contemplates building a new manufacturing facility and will need to seek loanable funds of $130 million. It expects that the new facility will yield a 12% return on investment (ROI). What is the current loanable funds market equilibrium rate depicted in the graph below? Given the current loanable funds market equilibrium depicted in the graph below, is it likely that the firm will borrow the money to build the new facility? Why?
Description: A graph showing the supply, in a red straight line rising to the right, and demand, in a straight blue line descending to the right, for loanable funds with the market interest rates on the vertical axis and money available on the horizontal axis. Initial equilibrium is at 8% interest rate and 300 million dollars.
(Enter response here.)
2. Given the income and consumption for the three individuals in the table below, calculate their individual marginal propensity to consume (MPC) and the total marginal propensity to consume for the entire group.
Name |
Income |
Consumption |
MPC |
Anne |
$20,000 |
$17,000 |
(Enter response here.) |
Brad |
$30,000 |
$22,000 |
(Enter response here.) |
Claire |
$40,000 |
$24,000 |
(Enter response here.) |
Total |
(Enter response here.) |
(Enter response here.) |
(Enter response here.) |
3. The following questions relate to long-run macroeconomic equilibrium and the stock market boom.
Assume that a hypothetical economy is at long-run macroeconomic equilibrium with full employment and stable prices. Suddenly, the stock market prices increased much more than expected, increasing investors’ wealth and causing a short-term period of increased optimism about the future of the economy.
a. In the short-run, will the AS curve or the AD curve shift? In which direction will it shift?
(Enter response here.)
b. In the short-run, what will happen to the price level and the quantity of output (real GDP)?
(Enter response here.)
c. Explain what, if any, impact will there likely be on workers’ wages and the reasons for this impact.
(Enter response here.)
d. In the long-run, which curve will shift due to the change in wages and price expectations created by the stock market boom? In which direction will it shift?
(Enter response here.)
e. When the economy returns to its long-term output level, how will the new long-run macroeconomic equilibrium differ from the original equilibrium?
(Enter response here.)
4. Studies indicate that net exports and net capital outflows tend to be equal.
a. Explain why net exports and net capital outflows always tend to be equal.
(Enter response here.)
b. Explain how a change in interest rates can lead to changes in net exports?
(Enter response here.)
5. Assume there is a decrease in the demand for goods and services, which leads to a decrease in the real GDP, and eventually the economy falls into recession.
a. When the economy enters a recession due to a decline in demand, what will happen to the price level?
(Enter response here.)
b. Assume there is no government intervention. Explain how the economy will eventually get back to the natural rate of output (real GDP)?
(Enter response here.)
6. Several macroeconomic variables decline during recessions. One of these variables is the GDP.
a. What other variables, besides real GDP, tend to decline during recessions? Given the definition of real GDP and its components, explain the expected declines in these economic variables.
(Enter response here.)
b. Empirical studies indicate that the long-run trend in real GDP of the USA has an upward trend. How is this possible given business cycles and macroeconomic fluctuations? What factors explain the upward trend despite the cycles?
(Enter response here.)
———————-
References:
Author. (Date.) Title. Source.
Directions for Submitting Your Assignment
Before you submit your assignment, you should save your work on your computer and use the correct filename that is specified in item 1 of the General Instructions for all assignments. When you are ready, submit to the Unit 6 Assignment Dropbox.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Wridemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.