ZuoTi.Pro
Question

What would cause the BOTH the price level to decrease and real GDP to decrease? O a shift to the left of the AD curve a shift
business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

5. A shift to the left of the AD Curve will decrease both equilibrium price level and meal GDP Price A level SRAS K AD2Real G

0 0
Add a comment
Know the answer?
Add Answer to:
What would cause the BOTH the price level to decrease and real GDP to decrease? O...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 1. Explain what will happen to the price level real GDP and the unemployment rate in...

    1. Explain what will happen to the price level real GDP and the unemployment rate in the following cases: a. AD falls by the same amount that SRAS rises b. AD falls by less than SRAS rises c. AD falls by more than SRAS falls d. AD falls by the same amount that SRAS falls e. AD falls by less than SRAS falls 2. Explain how expectations about future sales will affect investment. 3. How will a change in the...

  • A decrease in the price level causes households to purchase more goods and services. This is...

    A decrease in the price level causes households to purchase more goods and services. This is illustrated on the AD/AS model as a shift of the aggregate demand curve to the right. Select one: True False A realistic unemployment rate in the U.S. that corresponds with a real GDP growth rate of 0.5 percent growth would be a rate that is above 5 percent. Select one: True False Suppose a stock market crash makes people feel less wealthy. The decrease...

  • Given a downward-sloping aggregate demand (AD) curve and an upward-sloping short-run aggregate supply curve (SRAS), equilibrium...

    Given a downward-sloping aggregate demand (AD) curve and an upward-sloping short-run aggregate supply curve (SRAS), equilibrium occurs where the two intersect. The value on the vertical axis is the equilibrium price level and the value on the horizontal axis is the equilibrium value of real GDP or output. What happens to the economy when AD shifts? It is useful to sketch a graph and show the shift. Suppose, for example, interest rates fall or wealth increases due to a stock...

  • QUESTION 6 The aggregate demand curve would shift to the right as a result of a...

    QUESTION 6 The aggregate demand curve would shift to the right as a result of a drop in the foreign exchange value of the dollar. a decrease in the amount of money in circulation. a drop in the price level. tax increases. QUESTION 16 According to Keynesian economics using the modern short-run aggregate supply curve, if there are unutilized resources in the economy and the aggregate demand decreases real GDP will fall and price level will fall. real GDP will...

  • Which of the following will most likely cause a decrease in short-run aggregate supply (leftward shift) in the goods and services market?

     35. Which of the following will most likely cause a decrease in short-run aggregate supply (leftward shift) in the goods and services market? a. An increase in the productivity of labor b. A reduction in the price of crude oil, a major imported commodity c. An increase in resource prices d. Favorable weather conditions in agricultural areas. 36. The vertical long-run aggregate supply curve reflects the fact that in the long run, an increase in the price level. a. Will not alter the economy's maximum...

  • What might cause the Aggregate Demand curve to shift to the right? What does this mean...

    What might cause the Aggregate Demand curve to shift to the right? What does this mean for the state of the economy? What might cause the Aggregate Demand curve to shift to the left? What does this mean for the state of the economy? Sometimes the Aggregate Supply curve is drawn as an upward sloping straight line--other times it is drawn initially flat, then upsloping, then very steep. How does the shape of the AS curve matter for the effect...

  • Question 1 An increase in the price level will ________ the real value of wealth and,...

    Question 1 An increase in the price level will ________ the real value of wealth and, as a result, there will be ________ the aggregate demand curve. have no effect on; no change in increase; a rightward shift of reduce; an upward movement along reduce; a leftward shift of increase; an upward movement along 2. A severe drought hits a country and reduces farm output by 50 percent. This will impact aggregate demand. short-run aggregate supply and aggregate demand. short-run...

  • An increase in foreign prices relative to the price level in the

    An increase in foreign prices relative to the price level in the U.S. will cause: U.S. net exports to rise. US aggregate demand to fall. U.S.net exports to fallIf you are looking at a graph where a cumulative upward sloping curve plots the relationship between price level and output for suppliers, you are looking at a aggregate demand curve graph. aggregate supply curve graph. microeconomic supply graph.The economy has shifted and the quantity of the real GDP supplied has increased. What has potentially happened to aggregate...

  • Thank You! QUESTION 30 Aggregate price level x Real GDP in the price level and a...

    Thank You! QUESTION 30 Aggregate price level x Real GDP in the price level and a decrease in the In the Aggregate Demand and Supply model (shown), an increase in nominal wages would cause an increase equilibrium level or real GDP in the short run. QUESTION 31 Aggregate price level Real GDP In the Aggregate Demand and Supply model (shown), if the government's budget deficit increases as a result of a tax cut with no cuts in spending, the result...

  • As prices rise, a fixed money supply will be able to buy fewer goods and services....

    As prices rise, a fixed money supply will be able to buy fewer goods and services. This real balance effect is due to a(n) reduction in the interest rate. Increase in aggregate demand Decline in the purchasing power of the fixed quantity of money. Increase in income. The international substitution effect exists because a Higher price level will reduce interest rates and stimulate foreign investment. Lower price level will make domestically produced goods less expensive relative to foreign goods. Higher...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT