ECNC Project-2

ECON 214

Problem Set 2

Complete all questions listed below. Clearly label your answers

1. What impact would a change that shifts an economy’s production possibilities curve outward have on the long run aggregate supply curve? How have improvements in computer technology affected production possibilities and the long run aggregate supply curve? Explain

2. Construct the AD, SRAS, and LRAS curves for an economy experiencing: (a) full employment, (b) an economic boom, and (c) a recession. (Graphs can be hand drawn or done by computer; label all curves and axes clearly.)

3.

What is a budget deficit? How are budget deficits financed? Why do Keynesians believe that budget deficits will increase aggregate demand?

4. When output and employment slowed in early 2008, the Bush Administration and the Democratic Congress passed a legislation sending households a check for $600 for each adult (and $300 per child). These checks were financed by borrowing. Would a Keynesian favor this action? Why or why not?

On Question 2 of Problem Set #2, you will need to create three separate graphs with respective AD, SRAS, and LRAS for three conditions (Equilibrium, Economic Boom, and Economic Bust). Be sure to include these graphs either as a separate attachment or within your submission.

Here are some information in reference to creating the graphs.
Some have copied similiar graphs from other sources, but if you do this, you must be sure you select the correct graphs and cite/reference the source (otherwise, it is a from of plagarism). Then uploaded them onto Blackboard or within their homework assignment.

Others, have used graphic software to construct their own graphs, and then uploaded them as separate attachments.

Then, there have been some who drew their own graphs, and then photographed them with either a digital camera or smart phone, and then uploaded the files into Blackboard.

Just some ideas that you might consider, but be sure you select the correct on…..brimea