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Assignment 5 B

The document provides instructions for a college economics assignment. Students are asked to solve review questions from a textbook, describe aggregate demand and supply curves, and analyze the effects of consumer optimism, government purchases, and taxes using the aggregate demand-aggregate supply framework.

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Prince Wamiq
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42 views

Assignment 5 B

The document provides instructions for a college economics assignment. Students are asked to solve review questions from a textbook, describe aggregate demand and supply curves, and analyze the effects of consumer optimism, government purchases, and taxes using the aggregate demand-aggregate supply framework.

Uploaded by

Prince Wamiq
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Name: ________________________________

INSTITUTE OF BUSINESS MANAGEMENT

COLLEGE OF BUSINESS MANAGEMENT


ECO 401 Micro and Macro Economics
Assignment # 5B

Due Date: On the day of Final Exam

Solve the following questions from the book I sent you people in soft format i.e. 8th edition, Abel and Bernanke
(Macroeconomics).
1. From Page 314 solve all the Review Questions
2. What two variables are related by the aggregate demand (AD) curve? Why does the AD curve slope
downward? Give two examples of changes in the economy that shift the AD curve up and to the right
and explain why the shifts occur.
3. Describe the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS)
curve. Why is one of these curves horizontal and the other vertical?
4. Use the ADAS framework to analyze whether money is neutral in the short run and whether it is
neutral in the long run.
5. Use the ADAS framework to analyze the effect of the following on output, employment and price
level according to Classical economists and Keynesian economists.
b. An increase in consumer optimism that increases desired consumption at each level of income
and the real interest rate.
c. A temporary increase in government purchases.
d. An increase in lump-sum taxes, with no change in government purchases
Note: The Assignment should be hand written on A4 paper. Read chapter 8 and your class lecture carefully before solving this
assignment.

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