Homework Answers
Answer: (a)
Rise in the oil price, would cause rise in the cost of production. Thus short run supply curve will shift to left. Price will rise and GDP level will decrease.
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Suppose that a war in the Middle East where much of the world's oil supply is...
If a war breaks out in the Middle East causing the oil price to go up,...
If a war breaks out in the Middle East causing the oil price to go up, then what may happen to the US economy? a. SRAS curve will shift to the left causing output to decrease and the price level to increase b. SRAS curve will shift to the right causing output to increase and the price level to decrease c. AD curve will shift to the right causing the price level to increase d. None of the above Liquidity...
At higher rates of interest households save less because it is more expensive to save. businesses...
At higher rates of interest households save less because it is more expensive to save. businesses demand more investment because there are more funds available to invest. households save more because they get a greater return on their savings. businesses demand more investment because future profitability is likely to be greater. 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...
17- Both the long run and short run aggregate supply curve will shift when an event...
17- Both the long run and short run aggregate supply curve will shift when an event occurs which is expected to last only a short period of time. they are both upward sloping. a war occurs in the Middle East. the endowments of the factors of production changes 19- Cost-push inflation occurs when the aggregate supply curve shifts to the right, while aggregate demand remains stable. when the aggregate demand curve shifts to the left, while aggregate supply remains stable....
4. Suppose war broke out in the Middle East and gasoline and diesel fuel prices began...
4. Suppose war broke out in the Middle East and gasoline and diesel fuel prices began rising. Jeepney drivers and bus owners feared future oil shortages if war cut off the flow of oil, and they rushed to fill up their fuel tanks. In this case, as the price of fuel in- creased, jeepney drivers and bus owners bought more, not less. Is this an exception to the law of demand? Use the terminology of the demand and supply model...
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...
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...
An increase in the price level will A) shift the aggregate demand curve to the left.
7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand curve to the right. C) move the economy up along the aggregate demand curve. D) move the economy down along the aggregate demand curve. 8) Expansionary monetary policy involves A) reducing money supply and lowering taxes B) increasing money supply to decrease interest rate C) increasing government spending and cutting money supply D) increasing the interest rate and increasing taxes 9) Long-run macroeconomic equilibrium occurs when A) aggregate demand...
Please help with both questions The short-run aggregate supply curve is horizontal when Othere are unemployed...
Please help with both questions
The short-run aggregate supply curve is horizontal when Othere are unemployed resources and prices do not increase when aggregate demand increases. there are no unemployed resources and prices do not increase when aggregate demand or supply increases. prices are inflexible and the economy is at full employment. Othere are unemployed resources and prices do not decrease when aggregate supply increases. 0.5 points Save Answer QUESTION 6 A reduction in nominal wages will cause which of...
Inter est rate (percent) S1 S2 r1 Di Quantity of money per period What happens in...
Inter est rate (percent) S1 S2 r1 Di Quantity of money per period What happens in the aggregate economy (ADAS model) as a result of the increase in money supply and reduction in interest rates? The aggregate demand curve shifts to the left. The aggregate demand curve shifts to the right. The short-run aggregate supply curve shifts to the right. The short-run aggregate supply curve shifts to the left.
The following figure depicts the aggregate demand (AD), theshort-run aggregate supply (SRAS), and the long-run...
The following figure depicts the aggregate demand (AD), the
short-run aggregate supply (SRAS), and the long-run aggregate
supply (LRAS) curves for an economy. The economy is initially at
long-run equilibrium, at point A. Suppose that there is an increase
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...
4. Suppose war broke out in the Middle East and gasoline and diesel fuel prices began rising. Jeepney drivers and bus owners feared future oil shortages if war cut off the flow of oil, and they rushed to fill up their fuel tanks. In this case, as the price of fuel in- creased, jeepney drivers and bus owners bought more, not less. Is this an exception to the law of demand? Use the terminology of the demand and supply model...
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...
Please help with both questions
The short-run aggregate supply curve is horizontal when Othere are unemployed resources and prices do not increase when aggregate demand increases. there are no unemployed resources and prices do not increase when aggregate demand or supply increases. prices are inflexible and the economy is at full employment. Othere are unemployed resources and prices do not decrease when aggregate supply increases. 0.5 points Save Answer QUESTION 6 A reduction in nominal wages will cause which of...
Inter est rate (percent) S1 S2 r1 Di Quantity of money per period What happens in the aggregate economy (ADAS model) as a result of the increase in money supply and reduction in interest rates? The aggregate demand curve shifts to the left. The aggregate demand curve shifts to the right. The short-run aggregate supply curve shifts to the right. The short-run aggregate supply curve shifts to the left.
The following figure depicts the aggregate demand (AD), the
short-run aggregate supply (SRAS), and the long-run aggregate
supply (LRAS) curves for an economy. The economy is initially at
long-run equilibrium, at point A. Suppose that there is an increase
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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