RGDP growth rate

1. Critically but very briefly explain why the minimum RGDP growth rate to achieve full employment for the US is constrained by 3%. Give numerical examples by using relevant equations and compare with other countries’ position.

2. explain briefly why the shape of the SRAS curve is relatively flat during severe recession and increasingly slopes upward as the economy reaches to full employment and beyond full employment.

3. Explain why AD curve slopes downward

4. Draw a graph for AD-AS model you learned in this chapter 7 and indicate a situation with demand side inflation and also indicate another situation with Supply Side inflation on the same graph.

5. What is Keynesian multiplier and how does it expand the economy at the rate of multiple of initial expenditure amount injected to the economy. Give numerical example as part of your answer.

6. In the following table, several factors are listed that shift AD and/or AS curves to change equilibrium price level and RGDP. Reading the descriptions of factors in the first column, answer their effects in the rest of the columns as indicated.

Changes in events	Shift of AD to right or left	Shift of AS right or left	Change in price level and RGDP
Increase in oil price
Increase in technology and productivity
Increase in Govt Spending
Increase in Taxes on wage earners
Increase in consumer confidence
Decrease in expected inflation
Increase in currency exchange rate