6. Give 5 examples that can shift the AD to the right 7. Give 5 examples that can shift the AD to the left
8. Give 5 examples that can shift the SRAS & LRAS to the right
9. Give 5 examples that can shift the SRAS & LRAS to the left
6) AD will shifts to the right when demand will be increased. Examples are
a) Income is increased. assume the good is normal good
b) The price of the substitute good increase
c) The price of complementary goods falls
d) An advertisement that the product can increase the welfare. For an example, the advertisement that consuming milk can increase the health benefit of the child so the demand for milk will be increased.
e) seasonal factors. For an example in the time of winter demand for woolen cloths increase.
AD curve shifts to the left when the demand decrease. examples are
a) Income is decreased consider goods are normal
b) Decrease the popularity of a brand.
c)the price of substitute goods decrease.
d) The price of complementary goods increase.
e) seasonal factor. An example at summer demand for warm cloth decreases.
8) SRAS and LRAS shifts to the right when supply increases. SRAS shifts when supply changes in the short run. LRAS shifts when supply changes permanently. Examples are
a) improvement in technology
b) Decrease in input prices
c) a change in expectation that increases current supply.
d) Increase in the number of sellers.
e) good climate. For an example, a good amount of rain can raise more crops.
9) SRAS and LRAS shifts to the left when supply decresaes. Examples are
a) A decrease in technology that is by using backdated technology supply can decrease.
b) Increase input price which makes it costly to produce goods
c) Change in an expectation that decrease current supply
d) Decrease in the number of sellers.
e) natural calamity such as flood destroys half of the crop of a country. then the supply of that crop will be decreased.
6. Give 5 examples that can shift the AD to the right 7. Give 5 examples...
(Figure: AD– AS Model II) Refer to Figure:
AD– AS Model II. If the value of household wealth
increases, the _____ curve will shift to the _____.
A.
SRAS; right
B.
SRAS; left
C.
AD; left
D.
AD; right
Aggregate price level LRAS SRAS1 E1 P1 AD1 Y, = potential output Real GDP
During a recession consumption falls, causing the aggregate demand curve to shift to the ________. In response, the government can increase government spending to shift the ________. a. left; aggregate demand (AD) curve to the right b. left; short-run aggregate supply (SRAS) curve to the right c. right; aggregate demand (AD) curve to the left d. right; short-run aggregate supply (SRAS) curve to the right e. left; long-run aggregate supply (LRAS) curve to the right
Figure 15-2 %) LRAS SRAS 5 6 7 8 9 *(%) Refer to the Figure 15-2. In a closed economy, what would cause the aggregate demand curve to shift from AD to AD*? 1 a. a decrease in stock prices b. an increase in government purchases O can increase in the price level 10 d. an increase in consumer and firm optimism about the future
If the price level decreases, then aggregate demand increase along the AD curve but the curve doesn’t shift. a. True b. False The Long-run Aggregate Supply Curve (LRAS) can shift to the right because of: a. Discovery of more natural resources b. Development of more efficient technology c. Inviting more labor force through Immigration d. All of the above Which of the following may happen due to a crash in the stock market: a. AD curve may shift to the...
Which of the following could cause the shift depicted in the graph below? P AD, AD, LRAS SRAS an increase in consumer confidence an increase in interest rates a favorable weather event an increase in resource prices
a) Provide a factor that would shift the long-run aggregate supply (LRAS) curve to the right. What does this shift in LRAS imply for aggregate output? Use the Aggregate Demand and Supply model to illustrate this event. Make sure you properly label all the axes and curves. (You only need to draw a shift in LRAS curve, no need to draw other curves). b) Provide a factor that would shift the short-run aggregate supply (SRAS) curve upward (and to the...
Inflationary pressure in the AS-AD model can be shown as a leftward shift of the AD curve when the economy is already producing at its potential GDP. supply shock that shifts the AS to the right. rightward shift of the AD curve when the economy is already producing at its potential GDP. Typically, if consumer and business confidence is high then ________ and if consumer and business confidence is low then ________. AD shifts to the left; AD shifts to...
supply curve to shift leftward to SRAS, as shown in the graph at right. The economy is currently in short-run equilibrium at point E, and the reduction in supply is expected to be permanent. LRAS SRAS SRAS 1.) Using the line drawing and/or 3-point curved line drawing tool, show the adjustment to long-run equilibrium in this situation. Properly label your new curve(s). 2.) Using the point drawing tool, identify the new long-run equilibrium point and label the point 'E2 Carefully...
7. SRAS, LRAS, AD curves are used to analyze macroeconomic changes. Which of these three curves or lines will shift and in which direction (right or left) under the following conditions? a. Oil is used as input in the production of many goods. Say, oil prices increase: b. A tax credit for small businesses inspires firms to buy new company cars: F. A decrease in the prices of raw materials that are used in the production process d. An increase...
The assignment is about drawing the graph of AD, SRAS and LRAS and writing down what would happen under the condition "decrease in personal income taxes" Need to write down everything that happens by following the seven steps: 1) What would happen under the condition? (Whether AD, SRAS, or LRAS would change? And in which direction the curve would shift?) 2) Where is the new short-run equilibrium? (You need to mark the point in the graph.) 3) What changed in...