STAR WARS
It is 5 BBY and the Empire has moved the Death Star (DS-1) to the Horuz system to complete construction. Quadanium steel and Quadanium alloy are used for a majority of the construction of DS-1, much of which is mined from the planet Despayre by slaves. Despayre’s Quadanium steel mining was previously oriented toward supplying ship construction across the galaxy, and the surplus from increased present production becomes an additional profit source for the Empire and the Despayrian mining industry. As the Empire builds and updates mining infrastructure and technologies on the planet, turning it into one of the biggest Quadanium steel producers in the galaxy, what happens?
SRAS shifts to the right (though commodity prices rise a bit for ship manufacturers because a lot of the surplus Quadanium being produced is being used for the Death Star, the increase in worker productivity and thus production capabilities via the ripple effect outweighs this impact), AD shifts to the right (though Despayre’s Quadanium floods the market and increases physical stock of capital, given that Bloomberg finds that the 20-year cost of the Death Star was more than $192 quintillion, government spending probably outweighs). Prices are indeterminate, likely decreasing overall (there is still probably surplus from mining), GDP increases.
It is 21 BBY and Bothawui, a planet located at the intersection of four major trade routes, is recovering from infrastructure damage and debt from emergency defense spending that has resulted from General Grievous' attempted invasion of the planet in 22 BBY. As a result, the planet has raised its formerly low operating taxes by 125% for both small and large businesses. (8k credits to 10k credits for small businesses) Bothawui’s shipping and technology manufacturing industries are particularly negatively affected. What happens?
AD shift indeterminate (not at all/to the left) (less consumer confidence, taxes causing wealth effect, but alternatively, the problem does not specify a specific shift in the demand curve), SRAS shifts to the left (higher operating costs from taxes and increased transportation costs means that quantity of aggregate output they’re willing to supply at any given price level decreases), prices increase, GDP decreases.
A giant crime wave has swept through the nation! Everyone who steals stuff then promptly destroys it and gains no utility from the stolen items. What happens?
AD hasn’t shifted, SRAS has shifted left, so price has gone up and gdp has gone down.
Innersloth Co. has unveiled Among Us stress balls and slime, much to the chagrin of parents and joy of young children. Despite absurdly high prices ($30 for a 3x3 inch crewmate) sales of stress balls sail while slime does not, and employees have been well-trained to produce these products efficiently. However, consumers are reluctant to pay $26 for a burger-scented slime, and slime sales suffer. A worldwide shortage of borax, a critical slime component, is also present at the time of the unveiling. What happens?
AD shifts right (existing stock of capital is small and Greedy Children™,) SRAS shifts to the right (workers get more efficient,) price is indeterminate and GDP increases.
It is 32 BBY and the Galactic Senate has just passed Prop 31-814D, levying taxes on the Trade Federation’s previously tax-free business in the Free Trade Zones. As a result, the Trade Federation has blockaded the planet of Naboo, exacerbating the food shortages caused by Queen Sanandrassa’s policy of isolation. As grain shipments and other supply donations from other planets are turned away, supplies become increasingly difficult to access. Describe the effects of this blockade.
Prices increase, GDP decreases, AD does not shift (slight shift to the left is also acceptable; consumer confidence), SRAS shifts to the left.
A giant crime wave has swept through the nation! Everyone decides to steal stuff instead of paying for it, using the stolen items appropriately. What happens?
AD shift left, SRAS shifted left, prices are indeterminate, and gdp has gone down.
An economy that relies on trains for imports and domestic transport of goods has one of its largest train companies go out of business. With rippling effects on unemployment and economic growth threatening to spiral out of control, as a result, the government has decided to subsidize trucking and boat travel instead, fostering investment in vehicles and a new transportation system. However, it will be a few months until the new system is able to manage the extent of demand for goods. What happens?
AD shifts right (government increases spending for vehicles/gasoline,) SRAS shifts left (workers are less productive/temporary higher prices for each product,) price has gone up and GDP is indeterminate.
It is 5 BBY and the Empire has moved the Death Star (DS-1) to the Horuz system to complete construction. Quadanium steel and Quadanium alloy are used for a majority of the construction of DS-1, much of which is mined from the planet Despayre by slaves. Despayre’s Quadanium steel mining was previously one of two suppliers of steel for ship construction across the galaxy, however the Empire has seized control of the Desparian Quadanium steel mining industry and oriented it to focus solely on the construction of the DS-1. What happens?
SRAS shifts to the left (commodity prices rise sharply for ship manufacturers because half of the Quadanium being produced in the galaxy is now used for the Death Star, outweighing the benefits of worker productivity), AD shifts to the left (Although Bloomberg finds that the 20-year cost of the Death Star was more than $192 quintillion, it can be assumed that the resulting increased costs for transportation, shipping, and etc have galaxy-wide impacts, leading to severely decreased confidence (no shift is fine as well)). Prices increase overall (pretty much every commodity becomes more expensive as a result of shipping), GDP decreases.
A giant crime wave has swept through the nation! It’s called wage theft and it’s currently happening. What are its impacts?
AD has shifted left (lower wages), SRAS shifted right (lower wages), price has gone down and gdp is indeterminate.
A series of contractionary monetary policies are enacted in response to inflation in the city of Liechtenstein. Increased interest rates cause consumers to not take loans, and the remote country located in the Alps is losing its tourism industry due to COVID-19 lockdowns. Companies that rely on imports such as semiconductors or machinery are currently unavailable, and laborers are doing almost nothing at the factories when they are employed. What happens?
AD shifts left (bank reduces the quantity of money,) SRAS shifts left (inability to produce,) price [decreases/is indeterminate] and GDP decreases.