Assignment 8
This worksheet deals with all three of the concepts that we have learned. On question number 1 you begin by drawing the Aggregate Supply and Aggregate demand graph showing the economy in a recession since the unemployment rate is at 10%, this means that the aggregate demand and short run aggregate supply will intersect on the LEFT side of the Long Run Aggregate Supply line. They then want you to show what will happen to the aggregate demand line (it will shift to the right) based on the fiscal policy and the monetary policy employed by the federal government and the FED. The loanable funds market will show a decrease in the supply of loanable funds (or an increase in the demand of loanable funds) since the federal government will have to borrow to undertake the fiscal policy which they are doing. (Similar to what is going on right now). Lastly, in the money market the FED is buying bonds so this will make the money supply shift to the right (MS) since the FED is adding money to the system. Then answer the questions as best you can. This is a difficult worksheet and it is putting everything together that you are learning on your own, If it is too difficult then do not worry about it, but I wanted you to see how it all fits together. There is nothing really new on this worksheet but it is putting everything together.
Here is the worksheet for this, I have explained the answer to the first question above.
documentcloud.adobe.com/link/track?uri=urn%3Aaaid%3Ascds%3AUS%3Ad59b2504-981d-4c21-b33d-ccea1c2952d0
Here is the worksheet for this, I have explained the answer to the first question above.
documentcloud.adobe.com/link/track?uri=urn%3Aaaid%3Ascds%3AUS%3Ad59b2504-981d-4c21-b33d-ccea1c2952d0