a) Between 1990 and 1999, the Spanish economy was growing, due in large part to the construction of new housing, which people eagerly purchased. GDP grew every year, inflation fell, and unemployment cycled around the natural rate. How can you use the AS/AD model to explain this? That is, which curves are shifting (if any) and in what direction?
b) Between 1999 and 2007, the housing market in Spain continued to grow rapidly, but many of the houses remained vacant (empty). GDP continued to expand every year, and each year hundreds of thousands of new houses were built, with over half a million new houses built in both 2004 and 2005. During this period, unemployment fell to its lowest rate in over 20 years, but inflation was rising. How can you use the AS/AD model to explain this? That is, which curves are shifting (if any) and in what direction?
c) During this same period (1999 to 2007), housing prices rose 200%, and the number of vacant houses ballooned. That is, a bubble was being created. In 2008, this bubble burst. As a result, in 2008, housing prices fell 25% on average (up to 42% in some areas) and the building of new houses essentially stopped. The Spanish economy experienced its first contraction of GDP in 15 years, unemployment soared to almost 27%, and inflation turned negative. How can you use the AS/AD model to explain this? That is, which curves are shifting (if any) and in what direction?
d)If the Spanish government had allowed the economy to self-correct, what would have happened? That is, which curves would have shifted (if any) and in what direction? What would have happened to price level, GDP, and unemployment?
e) Instead, the Spanish government intervened with a financial bailout. Using the AS/AD model (be clear about which curves are shifting, if any), explain what changes this would result in. That is, what would happen to GDP, unemployment, and inflation? What would happen to interest rates?
Since all our papers are written from scratch, the papers we submit are plagiarism free and we strictly adhere to lecturer’s instructions. Our writers are highly qualified from all over the world and include graduates and professors from most of the largest and known universities in the world. Once you have assigned us your assignment, we select the most qualified and reliable writer to handle your assignment.
Unlike other writing companies, we encourage clients to draw back their money at any stage of the writing process if they experience any uncertainties with the quality of generated content. However, you will hardly have to make this decision because of our business approach that suits your needs.
We have an advanced plagiarism-detection system that flags any work that fails to meet the required academic expectations. Our company thrives in honesty, and as such, you will be guaranteed to achieve a paper that meets your expectations.
At homeworkpaper.org we have online agents that you can chat with to have your assignment taken care of with the little remaining time. Also, we have professional academic writers who will work on your assignment providing you with a high-quality paper at the same time. We can take care of your urgent assignments in less than 5 hours.
We uphold confidentiality and privacy through our interactions with clients, an aspect that has enhanced our relationship with prospective customers seeking for assignment help. We do not disclose your information with third-parties; neither do we share your work with any other person apart from you.
We do not resell previously-done tasks delivered to other clients. When we deliver orders to our clients, we safeguard their privacy and confidentiality by ensuring the third party does not access the work. By writing the papers from scratch, we have managed to maintain a certain level of originality, which defines our business model. Our qualified editors proofread all submitted work to eliminate mistakes that can interfere with the credibility of the assignment.