Homework Answers
Long run aggregate supply is the relationship between the quantity of real GDP supplied and the price level when the money wage rate changes in step with the price level to maintain full employment.
Short run aggregate supply is the relationship between the quantity of real GDP supplied and the price level when the money wage rate, the prices of other resources, and potential GDP remain constant.
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Long run aggregate supply is the relationship between the quantity of real GDP supplied and the...
How does cost push inflation begin? A cost-push inflation begins with as the result of an...
How does cost push inflation begin? A cost-push inflation begins with as the result of an increase in the money wage rate or an increase in the money prices of raw materials O A. an increase in aggregate demand OB. a decrease in short-run aggregate supply O C. an increase in short-run aggregate supply OD. a decrease in aggregate demand Explain for each event whether it changes the quantity of real GDP supplied, short-run aggregate supply, long run aggregate supply,...
The table gives the aggregate demand schedule, the short run aggregate supply schedule, and the long run aggregat...
The table gives the aggregate demand schedule, the short run aggregate supply schedule, and the long run aggregate supply schedule for an economy What is the quantity of real GDP at the short-run macroeconomic equilibrium? Price level (GDP deflator) The quantity of real GDP at the short-run macroeconomic equilibrium is s billion 100 Real GDP Real GDP Real GDP supplied supplied demanded in short run in long run (billions of 2007 dollars) 200 500 350 500 500 500 400 650...
If the short-run aggregate supply decreases by more than the long-run aggregate supply, then, at the...
If the short-run aggregate supply decreases by more than the long-run aggregate supply, then, at the short-run equilibrium, a) Output will be equal to its natural level. b) Output will be above its natural level. O c) Unemployment will be equal to the natural rate of unemployment. d) Output will be below its natural level. Facebl» wides anಂಕು Suppose the economy is at point C. If investment spending decreases in the economy, where will the eventual long-run equilibrium be? a)...
The graph below depicts the aggregate demand, Irrun aggregate supply, and short-run aggregate supply curves for...
The graph below depicts the aggregate demand, Irrun aggregate supply, and short-run aggregate supply curves for the United States at an initial long-run macroeconomic equilibrium Price level] (P) LRAS SRAS Real GDP Consider a situation in which two things happen simultaneously: there is a deterioration of institutions, and the federal government massively increases spending. Which of the graphs below illustrates the shifts in this model given this situation? Price level Price level (P) (P) URAS LRAS, LRAS SRAS SRAS SRAS...
Complete the sentences. Aggregate demand increases if expected future income, inflation, or profits And aggregate demand...
Complete the sentences. Aggregate demand increases if expected future income, inflation, or profits And aggregate demand increases if fiscal policy government expenditure. SA O A. decrease; increases O B. increase; decreases OC. decrease, decreases OD. increase: increases Aggregate demand increases if fiscal policy transfer payments O A. decreases; increases OB. increases; increases O C. increases; decreases OD. decreases, decreases Aggregate demand increases if monetary policy the quantity of money and interest rates Click to select your answer. Complete the sentences....
1. An above-full-employment equilibrium occurs when Group of answer choices aggregate demand decreases while neither the...
1. An above-full-employment equilibrium occurs when Group of answer choices aggregate demand decreases while neither the short-run nor long-run aggregate supply changes. short-run aggregate supply decreases while neither aggregate demand nor long-run aggregate supply changes. the equilibrium level of real GDP is greater than potential GDP. the equilibrium level of real GDP is less than potential GDP. 2. Which of the following shifts the aggregate demand curve rightward? Group of answer choices a decrease in consumption an increase in investment...
2. Suppose the economy is in long-run equilibrium, with real GDP at $19 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases money supply by 6%. a) Illust...
2. Suppose the economy is in long-run equilibrium, with real GDP at $19 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases money supply by 6%. a) Illustrate the short-run effects of the monetary policy by using aggregate demand-aggregate supply model. Be sure to indicate the direction of change in real GDP, the price level and the unemployment rate. b) Illustrate the long-run effects of the monetary policy by using aggregate demand-aggregate supply model....
The graph shows the economy in long-run equilibrium Then the world economy expands and the demand...
The graph shows the economy in long-run equilibrium Then the world economy expands and the demand for U.S.-produced goods increases Price level (GDP deflator, 2009-100) 14 Draw a curve that shows 1) the effect of increased demand for U.S.-produced goods. Label it 1 2) the effect of a rising money wage rate that returns the economy to full employment. Label it 2. Draw a point at the new long-run equilibrium 13 SAS 12 An economy is in a long-run equilibrium....
Economics: Suppose the economy is in long-run equilibrium, with real GDP at $16 trillion and the...
Economics: Suppose the economy is in long-run equilibrium, with real GDP at $16 trillion and the unemployment rate at 5%. Now assume that the central bank increases the money supply by 6%. a. Illustrate the short-run effects on the macro-economy by using the aggregate supply-aggregate demand model. Be sure to indicate the direction of change in Real GDP, the Price Level, and the Unemployment Rate. Label all curves and axis for full credit.
Chinese Premier Wen Jiabao has wamed Japan that its companies operating in China should raise the...
Chinese Premier Wen Jiabao has wamed Japan that its companies operating in China should raise the pay for their workers. Explain how a rise in wages in China wil influence the quantity of real GDP supplied and aggregate supply in China A rise in wages in China O A. decreases China's short-run aggregate supply and the quantity of real GDP supplied does not change O B. decreases China's long-run aggregate supply with no change in short-run aggregate supply O C....
How does cost push inflation begin? A cost-push inflation begins with as the result of an increase in the money wage rate or an increase in the money prices of raw materials O A. an increase in aggregate demand OB. a decrease in short-run aggregate supply O C. an increase in short-run aggregate supply OD. a decrease in aggregate demand Explain for each event whether it changes the quantity of real GDP supplied, short-run aggregate supply, long run aggregate supply,...
The table gives the aggregate demand schedule, the short run aggregate supply schedule, and the long run aggregate supply schedule for an economy What is the quantity of real GDP at the short-run macroeconomic equilibrium? Price level (GDP deflator) The quantity of real GDP at the short-run macroeconomic equilibrium is s billion 100 Real GDP Real GDP Real GDP supplied supplied demanded in short run in long run (billions of 2007 dollars) 200 500 350 500 500 500 400 650...
If the short-run aggregate supply decreases by more than the long-run aggregate supply, then, at the short-run equilibrium, a) Output will be equal to its natural level. b) Output will be above its natural level. O c) Unemployment will be equal to the natural rate of unemployment. d) Output will be below its natural level. Facebl» wides anಂಕು Suppose the economy is at point C. If investment spending decreases in the economy, where will the eventual long-run equilibrium be? a)...
The graph below depicts the aggregate demand, Irrun aggregate supply, and short-run aggregate supply curves for the United States at an initial long-run macroeconomic equilibrium Price level] (P) LRAS SRAS Real GDP Consider a situation in which two things happen simultaneously: there is a deterioration of institutions, and the federal government massively increases spending. Which of the graphs below illustrates the shifts in this model given this situation? Price level Price level (P) (P) URAS LRAS, LRAS SRAS SRAS SRAS...
Complete the sentences. Aggregate demand increases if expected future income, inflation, or profits And aggregate demand increases if fiscal policy government expenditure. SA O A. decrease; increases O B. increase; decreases OC. decrease, decreases OD. increase: increases Aggregate demand increases if fiscal policy transfer payments O A. decreases; increases OB. increases; increases O C. increases; decreases OD. decreases, decreases Aggregate demand increases if monetary policy the quantity of money and interest rates Click to select your answer. Complete the sentences....
2. Suppose the economy is in long-run equilibrium, with real GDP at $19 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases money supply by 6%. a) Illustrate the short-run effects of the monetary policy by using aggregate demand-aggregate supply model. Be sure to indicate the direction of change in real GDP, the price level and the unemployment rate. b) Illustrate the long-run effects of the monetary policy by using aggregate demand-aggregate supply model....
The graph shows the economy in long-run equilibrium Then the world economy expands and the demand for U.S.-produced goods increases Price level (GDP deflator, 2009-100) 14 Draw a curve that shows 1) the effect of increased demand for U.S.-produced goods. Label it 1 2) the effect of a rising money wage rate that returns the economy to full employment. Label it 2. Draw a point at the new long-run equilibrium 13 SAS 12 An economy is in a long-run equilibrium....
Chinese Premier Wen Jiabao has wamed Japan that its companies operating in China should raise the pay for their workers. Explain how a rise in wages in China wil influence the quantity of real GDP supplied and aggregate supply in China A rise in wages in China O A. decreases China's short-run aggregate supply and the quantity of real GDP supplied does not change O B. decreases China's long-run aggregate supply with no change in short-run aggregate supply O C....
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