If the economy begins at long-run equilibrium at potential output when a negative aggregate demand shock...
If the economy begins at long-run equilibrium at potential output when a negative aggregate demand shock occurs,l initially there will be a ____________________ equilibrium because prices are _____________ in the short run.
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a. |
new long-run equilibrium below potential output, sticky |
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|
b. |
new short-run equilibrium below potential output, sticky |
|
|
c. |
new short-run equilibrium above potential output, sticky |
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|
d. |
new short-run equilibrium below potential output, flexible |
Homework Answers
There will be a new short run equilibrium where the short run aggregate supply and aggregate demand(with negative shock) with intersect.This is because prices are rigid in the short run.
Answer-B
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If the economy begins at long-run equilibrium at potential
output when a negative aggregate demand shock...
If the economy begins at long-run equilibrium at potential output when a negative aggregate demand shock occurs, l initi...
If the economy begins at long-run equilibrium at potential output when a negative aggregate demand shock occurs, l initially there will be a ____________________ equilibrium because prices are _____________ in the short run. a. new long-run equilibrium below potential output, sticky b.new short-run equilibrium below potential output, sticky c.new short-run equilibrium above potential output, sticky d.new short-run equilibrium below potential output, flexible
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Figure 20-1
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supply (LRAS) curves for an economy. The economy is initially at
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curve to the right, depicted below in the movement of the economy
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a. long-run aggregate supply.
b. aggregate demand.
c. short-run and long-run aggregate supply.
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Consider the exhibit below for the following questions.
Figure 20-1
Refer to Figure 20-1. The economy would be moving to long-run
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a. A and moved to B.
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in the amount of investment in the economy due to a reduction in
the real interest rate. This increase in investment shifts the AD
curve to the right, depicted below in the movement of the economy
from point A to point...
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