What happens when bad aggregate demand shocks hit the economy? Consider the following graph. a. Before we get to the bad aggregate demand shock, let’s find out what the Solow growth rate is in this economy. Use the quantity theory to find your answer.
b. Because of a fall in the growth of the money supply, spending growth falls to 4% per year. Draw the immediate result on aggregate demand in the graph.
c. This fall in money growth lasts for many years. Eventually, in the long run, workers, business owners, and consumers all adjust their inflation expectations enough so that the economy returns to the Solow growth rate. Draw this new SRAS curve in the figure above. d. In the long run, after spending growth falls to 4% per year, what will the Solow growth rate be? What will inflation be?

Miko willingly admits that she is not an accountant by training. she is concerned that her balance sheet might not be correct. she has provided you with the following additional information. 1. the boat actually belongs to miko, not to skysong, inc.. however, because she thinks she might take customers out on the boat occasionally, she decided to list it as an asset of the company. to be consistent, she also listed as a liability of the corporation her personal loan that she took out at the bank to buy the boat. 2. the inventory was originally purchased for $27,500, but due to a surge in demand miko now thinks she could sell it for $39,600. she thought it would be best to record it at $39,600. 3. included in the accounts receivable balance is $11,000 that miko loaned to her brother 5 years ago. miko included this in the receivables of skysong, inc. so she wouldn’t forget that her brother owes her money. (b) provide a corrected balance sheet for skysong, inc.. (hint: to get the balance sheet to balance, adjust stockholders’ equity.) (list assets in order of liquidity.)