The effects of a higher than expected price level are shown by a. shifting the short-run aggregate supply curve right. b...
The effects of a higher than expected price level are shown by
a. shifting the short-run aggregate supply curve right.
b. shifting the short-run aggregate supply curve left.
c. moving to the right along a given aggregate supply curve.
d. moving to the left along a given aggregate supply curve.
Homework Answers
If it is expected that in near future the price of that good may increase, so it is profitable to produce more. This is because at higher price the profitabilty will increase. Hence all firms wil supply more. Hence short-run aggregate supply curve shifts rightward.
Hence it can be said that the effects of a higher than expected price level are shown by shifting the short-run aggregate supply curve right.
Hence option a is the correct answer.
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The effects of a higher than expected price level are shown by a. shifting the short-run aggregate supply curve right. b...
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Please explain. Thank you! Which of the following shifts the short-run aggregate supply curve right? a....
Please explain. Thank you!
Which of the following shifts the short-run aggregate supply curve right? a. both an increase in the price level that is greater than expected and an increase in the expected price level. b. an increase in the price level that is greater than expected, but not an increase in the expected price level. c. an increase in the expected price level, but not an increase in the price level that is greater than expected. d. neither...
In the long run, the aggregate price level increases. This Select one: a. Is due to...
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The short-run aggregate supply curve is shown at right. Suppose OPEC decides to reduce oil production. Using the line drawing tool, draw and label a new short-run aggregate supply. Carefully follow the instructions above, and only follow the required object. The impact would result in Price Level AD O A. inflation: a lower price level and lower unemployment. O B. recession: a lower price level and higher unemployment. O C. stagflation: a higher price level and higher unemployment. OD. depression:...
5) The positive relationship between short-run aggregate supply and the price level indicates that, in the short run, •A) firms produce more output as the price level falls. •B) firms produce more output as the price level rises. •C) the money wage rate increases when moving along the short-run aggregate supply curve. •D) lower price levels are more profitable for firms.
Please explain. Thank you!
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