Question
complete the following table for anticipated and unanticipated expansionary policy
1st blank. higher or lower.2nd blank 350,300, 400,250. 3rd blank will/will not. 4th blank. will/will not. bottom 6 answers decrease, no change, or increase. please help.
1st also, need help with graphs
Aplias Student Question x ttempts:Average: 1 Average: /11 3. The rational expectations model AaAa Consider the following hypothetical situation: The U.S. economy is in equlilbrium at potential output, so unemployment is at its natural rate. Firms and workers negotlate annual wage agreements at the beginning of each year. At the beginning of this year, the Federal Reserve (the "Fed") announces that it will pursue monetary pollcy almed simply at sustaining potential output and the current price level throughout the year. The following graph shows the aggregate demand curve (AD), the long-run aggregate supply curve (LRAS), and the short-run aggregate supply curve at an expected price level of 150 (SRAS1s0) for this economy If firms and workers negotiate wagespased on the belief that the Fed is committed to price stablity PRICE LEVEL 300 LRAS 150 200 100 40 8 10 10 12 REAL GOPTraliens of dollars! Now suppose that after workers and firms have already agreed on nominal wages, public official with the unemployment rate, and the Fed decides to abandon its stated goal of price stability and instead pursue an expansionary curve, the SRAS curve, or both. that after workers and firms have already agreed on nominal wages, public officials become dissatisfied monetary policy. On the following graph, show the short-run effect of this policy by shifting the AD Tool tp: Cicek and drag one or both of the curves. Curves wll snap into position, so if you try to move a curve and it snaps back to its original position, just try again and drag it a little farther PRICE LEVEL 309 250
Explanation / Answer
Answer.
Blank 1 - Higher wage
Blank 2 - 350
Blank 3 - will
Blank 4 - will
Blank 5 - No change (Unemployment rate and anticipated expansionary policy in short run)
Blank 6 - Decrease (Unemployment rate and un-anticipated expansionary policy in short run)
Blank 7 - Increase ( Price level and anticipated expansionary policy)
Blank 8 - Increase ( Price level and un-anticipated expansionary policy)
Blank 9 - No change
Blank 10 - No change
