(Solved): 1. Aggregate demand, aggregate supply, and the Phillips curve In the year 2023, aggregate demand an ...

1. Aggregate demand, aggregate supply, and the Phillips curve In the year 2023, aggregate demand and aggregate supply in the fictional country of Drooble are represented by the curves \( A D \) yaz and AS on the following graph. The price level is 102 . The graph also shows two possible outcomes for 2024. The first potential aggregate demand curve is given by the \( A D_{\mathrm{A}} \) curve, resulting in the outcome illustrated by point \( A \). The second potential aggregate demand curve is given by the \( A D \) ar curve, resulting in the outcome mustrated by point B. Suppose the unemployment rate is \( 5 \% \) under one of these two outcomes and \( 3 \% \) under the other. Based on the previous graph, you would expect to be associated with the lower unemployment rate (3\%). mand is high in 2024, and the economy is at outcome \( B \), the inflation rate between 2023 and 2024 is Based on your answers to the previous questions, on the following graph use the purple point (oummond symbol) to plot the unempioyment rate and infiation rate if the economy is at point A. Next, use the green point (triangie symbod) to plot the unempioymicht rate and innation rate if the economy. is at point B. (As you piace these points, dashed drop lines will automaticaily extend to boch axes.) Finaily, wse the biack line (oross symoon to draw. the short-run Philligs curve for this oconamy in 2024 . Note: For graphing pruposes, round the inflation rate under each outcome to the nearest whole percent, For example, round \( 1.9 \% \) to \( 2.0 \% \). Hint: Hover your cursor over each point after you plot it to make sure you have placed it on the exact coordinate you intended. Suppose the unemployment rate is \( 5 \% \) under one of these two outcomes and \( 3 \% \) under the other, Based on the previous graph, you would expect to be associated with the lower unemployment rate (3\%). If aggregate demand is high in 2024 , and the economy is at outcome \( B \), the inflation rate between 2023 and 2024 is infiation rate if the economy is at point A. Next, use the green point (triangie symbol) to plot the unemployment rate \( 3.009 \) ) fon rate if the economy is at point 8. (As you place these points, dashed drop wnes will automatically extend to both axes.) Finaliy, use the b. \( 0.98 \% \) sross symbol) to draw the shart-run philips curve for this economy in \( 2024 . \) Note: For graphing pruposes, round the inflation rate under each outcome to the nearest whole percent. For example, 7otiur ,9\%6 to \( 2.0 \% \). Hint: Hover your cursor over each point after you plot it to make sure you have placed it on the exact coordinate you intended. If aggregate demand is high in 2024, and the cconomy is at outcome B, the inflation rate between 2023 and 2024 is Based on your answers to the previous questions, on the following graph use the purple polnt (diamond symbol) to plot the unemployment rate and infiation rate if the economy is at point \( A \). Next, use the green point (triangle symbol) to plot the unemployment rate and innation rate if the economy is at point B. (As you piace these points, dashed drop lines will automatically extend to both axes.) Finally, use the black Mne (cross symbol) to draw the short-run Phililps curve for this economy in \( 2024 . \) Note: For graphing pruposet, round the inflation rate under each outcome to the nearest whole percent, For example, round 1.9\%4 to z. owh. Mint: Hower your cursor over each point after you plot it to make sure you have piaced it on the exact coordinate you intended. Note: For graphing pruposers, round the infiation rate under each outcome to the nearest whole percent. For example, round 1,99 to \( 2.046 \). Hint: Hower your cursor over each point after you piot it to make sure you have placed it on the exact coordinate you intended. This would catise of the short-run Philligs curve, resulting in in the inflation rate and in the unemployment rate. UNEMPLDYMENT RATE (Percert) Suppose that the o Iring enacting an expansionary policy in 2023 that would shift oggregate demand in 2024 from AD \( A \). to AD 11 . This would cause a the short-run Phillips curve, resulting in in the inflation rate and in the unemployment rate. Suppose that the povernment is considening enacting an exparsionary policy in 202 . t aggregote demand in 2024 from \( A D_{\mathrm{A}} \) to \( A D_{\mathrm{a}} \). This would cause a the short-run Philips curve, resulting in Iit the inflation rate and in the bose that the government is considering enacting an expansionary policy in 2023 that would shift aggregate demand in 20 the thort-run Phillips curve, resulting in in the inflaticin rate and In the melenment rate.