Posted: March 2nd, 2020
Cyclical Unemployment Assignment | Homework For You
1. The graph above shows the AD/LRAS/SRAS functions for a country.
2. In the short run, wages and prices are sticky due to contracts, but they fully adjust to market conditions in the long run.
3.Marginal propensity to consume is MPC = 0.80
4.Okun’s coefficient equals α = 2.
5. Currently, all the markets are in equilibrium.
6. There is no foreign trade and so net exports equal zero.
7. Currently the government purchases equal G = 1,000 units.
8. All the questions refer independently to this baseline scenario.
9. The short run effects of a policy or an event on P and Y are defined as the values of these variables after the AD function shifts but before the SRAS function begins shifting.
question1:
1. Investment spending goes down by ΔI = -180. What will be the short-run effects on P and Y?
2. Investment spending goes down by ΔI = -180. What will be the short-run effect on cyclical unemployment rate? What will be the long-run effect on cyclical unemployment rate?By short-run and long-run effects, I mean the new values of the variables after the occurrence of an event. Economics Assignment: I need help writing a research paper.