The Following Question Has Three Parts, Which Are to Be

question 57

Essay

The following question has three parts, which are to be answered independently of each other. Graphically show your response to the following shocks in the AD-AS model:
A) If a new round of consumer pessimism abounds, what would happen to the economy's short-run growth rate?
B) If there is a positive, but temporary, monetary shock, what would happen to the economy's short-run growth rate?
C) If a country's imports temporarily increase, but exports stay the same, what would happen to the economy's short-run growth rate?

• A) If a new round of consumer pessimism abounds, what would happen to the economy's short-run growth rate?
• B) If there is a positive, but temporary, monetary shock, what would happen to the economy's short-run growth rate?
• C) If a country's imports temporarily increase, but exports stay the same, what would happen to the economy's short-run growth rate?

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Definitions:

Heat

A form of energy associated with the movement of atoms and molecules in substances.

Deformation

Processes that cause a rock body to change position, orientation, size, or shape, such as by folding, faulting, and shearing.

Metamorphic Rocks

Rocks that have been transformed from an original state into a new texture or structure by heat, pressure, and/or fluid activity.

Solidification

The process of a liquid becoming solid, especially upon cooling, as in the formation of igneous rock from cooled magma or lava.