Homework Answers
Answer:
A supply shock is a sudden increase in the price of an important natural resource, resulting in a leftward shift of the short run aggregate supply curve (SRAS) resulting higher price and lower production or output. Hence option B is the correct answer.
But Stagnation is a combination of inflation and recession and it occurs when a supply shock shifts the SRAS to the left, increasing the price level and decreasing actual GDP.
Add Answer to:
A supply shock is A. an increase in the rate of inflation as a result of...
Note: There is only one correct option. 1. To get the equilibrium level of income in...
Note: There is only one correct option.
1. To get the equilibrium level of income in the simple Keynesian model [1] we multiply the autonomous aggregate spending by the multiplier 12 we add all the autonomous aggregate spending component and subtract the multiplier [3] we divide the multiplier by aggregate demand [4] we multiply the interest rate by the multiplier 2. An increase in the tax rate in the Keynesian model will 1 shift the aggregate spending curve upwards in...
In February 2014, South Africa had an inflation interest rates in January and is expected to increase or maintain the interest rates through 2014
QUESTION 4 In February 2014, South Africa had an inflation interest rates in January and is expected to increase or maintain the interest rates through 2014. The South African central bank is pursuing rate of 5.9 % and an unemployment rate of 24.1%. The South African central bank raised a(n): contractionary monetary policy to contain inflation. expansionary monetary policy to contain inflation. expansionary monetary policy to fight unemployment. contractionary monetary policy to fight unemployment QUESTION 5 When the economy is sluggish, the Fed will: raise interest rates, which...
Section B B22 Expansionary demand management policy measures tend to… [1] raise the real GDP and...
Section B
B22 Expansionary demand management policy measures tend
to…
[1] raise the real GDP and inflation.
[2] increase price level and decrease real output.
[3] increase both inflation and the level of unemployment.
[4] Increase the production cost, which will decrease total
production.
B24 Which of the following is NOT the cause of
demand-pull inflation?
[1] increase in consumption spending.
[2] a decrease in interest rates.
[3] increase in net exports.
[4] rising commodity (e.g. oil) price.
B25 Cost-push...
46. In the AD-AS model, an unexpected decrease in the growth rate of the money supply...
46. In the AD-AS model, an unexpected decrease in the growth rate of the money supply causes: A) a rightward shift of the AD curve and then a leftward shift of the SRAS curve. B) a rightward shift of the AD curve and then a rightward shift of the SRAS curve. C) a leftward shift of the AD curve and then a leftward shift of the SRAS curve. D) a leftward shift of the AD curve and then a rightward...
Answer these 4 will rate after Graphically, a negative supply shock, such as the increase in...
Answer these 4 will rate after
Graphically, a negative supply shock, such as the increase in oil prices in 1973, can be shown as: O a leftward shift of the AD curve. a downward and to the right shift of the SR-AS curve. an upward and to the left shift of SR-AS curve. O a rightward shift of the AD curve. Decreases in short-run aggregate supply due to a reduction in the nation's resources result in O an increase in...
1.The figure below depicts the macroeconomic situation of stagflation[1] inflicted by the negative supply shock. As...
1.The figure below
depicts the macroeconomic situation of
stagflation[1] inflicted by the negative
supply shock.
As the economic advisor to PM Scott Morrison (!), you are
contemplating the most appropriate policy response from the two
choices (note that we do not consider the monetary policy here) in
a given scenario below;
Expansionary fiscal policy
Contractionary fiscal policy
For this question, there is no need to demonstrate the
answer showing in the figure (but useful to have it in your
mind)!...
30-33 30) An appropriate fiscal policy for a severe recession is B) a decrease in tax...
30-33
30) An appropriate fiscal policy for a severe recession is B) a decrease in tax rates. D) a decrease in government spending. A) appreciation of the dollar. C) an increase in interest rates. 31) A contractionary fiscal policy is shown as a A) rightward shift in the economy's aggregate demand curve. B) rightward shift in the economy's aggregate supply curve C) leftward shift in the economy's aggregate demand curve. D) movement along an existing aggregate demand curve. 32) A...
Question 1: According to Milton Friedman, the reason there are two Phillips curves is because a....
Question 1: According to Milton Friedman, the reason there are two Phillips curves is because a. prices are inflexible. b. the expected inflation rate does not instantaneously adjust to changes in the actual inflation rate. c. the expected inflation rate is equal to 1 minus the actual inflation rate. d. the expected inflation rate adjusts to changes in the actual inflation rate. Question 2: Milton Friedman argued that there a, are two Phillips curves, a short-run one and a long-run...
1. What occurs during a negative demand shock? Output increases and the price level decreases. Output...
1. What occurs during a negative demand shock? Output increases and the price level decreases. Output and price level decrease. Output and price level increase. Output decreases and the price level increases. 2. In the equation of exchange, the term P × Q is the same as: the money supply. nominal GDP. national income. real GDP. 3. Expansionary monetary policy shifts the _____ curve to the _____. AD; right SRAS; left SRAS; right AD; left 4. The Taylor rule suggests...
Illustrate and briefly explain the beginning of a demand-pull inflation. 3. When answering parts a and b,...
Illustrate and briefly explain the beginning of a demand-pull inflation. 3. When answering parts a and b, draw the relevant Phillips curve. Using a short-run Phillips curve, what is the effect on the unemployment rate if the inflation rate unexpectedly rises. Using a long-run Phillips curve, what is the effect on the unemployment rate if the inflation rate rises and people expect the rise. Explain how your answer to part a about the unexpected rise in the inflation rate changes in...
Note: There is only one correct option.
1. To get the equilibrium level of income in the simple Keynesian model [1] we multiply the autonomous aggregate spending by the multiplier 12 we add all the autonomous aggregate spending component and subtract the multiplier [3] we divide the multiplier by aggregate demand [4] we multiply the interest rate by the multiplier 2. An increase in the tax rate in the Keynesian model will 1 shift the aggregate spending curve upwards in...
Section B
B22 Expansionary demand management policy measures tend
to…
[1] raise the real GDP and inflation.
[2] increase price level and decrease real output.
[3] increase both inflation and the level of unemployment.
[4] Increase the production cost, which will decrease total
production.
B24 Which of the following is NOT the cause of
demand-pull inflation?
[1] increase in consumption spending.
[2] a decrease in interest rates.
[3] increase in net exports.
[4] rising commodity (e.g. oil) price.
B25 Cost-push...
46. In the AD-AS model, an unexpected decrease in the growth rate of the money supply causes: A) a rightward shift of the AD curve and then a leftward shift of the SRAS curve. B) a rightward shift of the AD curve and then a rightward shift of the SRAS curve. C) a leftward shift of the AD curve and then a leftward shift of the SRAS curve. D) a leftward shift of the AD curve and then a rightward...
Answer these 4 will rate after
Graphically, a negative supply shock, such as the increase in oil prices in 1973, can be shown as: O a leftward shift of the AD curve. a downward and to the right shift of the SR-AS curve. an upward and to the left shift of SR-AS curve. O a rightward shift of the AD curve. Decreases in short-run aggregate supply due to a reduction in the nation's resources result in O an increase in...
1.The figure below
depicts the macroeconomic situation of
stagflation[1] inflicted by the negative
supply shock.
As the economic advisor to PM Scott Morrison (!), you are
contemplating the most appropriate policy response from the two
choices (note that we do not consider the monetary policy here) in
a given scenario below;
Expansionary fiscal policy
Contractionary fiscal policy
For this question, there is no need to demonstrate the
answer showing in the figure (but useful to have it in your
mind)!...
30-33
30) An appropriate fiscal policy for a severe recession is B) a decrease in tax rates. D) a decrease in government spending. A) appreciation of the dollar. C) an increase in interest rates. 31) A contractionary fiscal policy is shown as a A) rightward shift in the economy's aggregate demand curve. B) rightward shift in the economy's aggregate supply curve C) leftward shift in the economy's aggregate demand curve. D) movement along an existing aggregate demand curve. 32) A...
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