Welcome to Live Chat
Welcome to LiveWebTutors Services, World's leading Academic solutions provider with Millions of Happy Students.
24x7 Support Available
To Get the Best Price Chat With Our Experts
In A Hurry? Get A Callback
View Complete Question >>
View Less >>
Consider a macro economy was initially at equilibrium level of real GDP. Using an aggregate demand and aggregate supply diagram or model of the economy, graphically illustrate and discuss the short-run and long-run effects of the following events upon the economy:
(a) The Central Bank within the economy reduces interest rates.
In case the Central Bank increases the interest rate, it will result into tightening of the providing credit. All of it will cause increase in the cost of capital and there will be reduction in the money supply. This condition will force the aggregate demand curve to move shift leftwards. If the interest rate is increased, the banks will be encouraged to lend money. But, because of the reduction in demand there will be a fall in supply.
(b) There is an increase in private domestic investment spending.
In case the private domestic investing increases, the demand for the goods will increase which means that the aggregate demand curve will shift rightward, thus causing an increase in the equilibrium price.
(c) An increase in international oil prices.
As per the law of demand and supply, if there is an increase in oil price, it should result into a fall in the demand for oil. But, this law does not work as is in the case of oil because it is a necessary product and the people will buy it even if there is an increase in its price. In this case,
Orginal Price : $28.60
Don’t delay more, place your order now. Quick assignment help will be offered to you.
I trust LiveWebTutors for my assignments because of their ability to deliver the perfect assignments time and again. Only a few of my assignments required minor revisions. The rest assured it is the best assignment writing service in the market.
I felt so exhausted and burdened with the large number of assignments I had to write and desperately needed someone to help me with all the writing and there was LiveWebTutors company on the internet. They finished my assignments before the due date and also offered me a first-timer discount.
I ordered my Mathematics and Marketing assignments from them last month. I received the content on the set date. Most importantly, the assignments were well-written and plagiarism free. I scored a top grade for the assignment written by them. They are a reliable company.
I was quite unsure about getting my assignment written online but after coming across LiveWebTutors.com, all my worries have vanished. The quality of the assignments written by their writers is just invincible. Their customer support is very polite and helpful. You should try their service at least once