Homework Answers
ANSWER-1)
The price increases in the short run due to a shortage of supply. Thus allows firms to earn to widen profit margins and signal producers to increase output. Since existing firms may increase the production and new firms may also enter the industry in the long run; thus as result supply shortage will disappear and consequently the prices will fall. As a result even costs, which initially remain unchanged, will start creeping upward and output will again decline to its long-run level.
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Chapter 13 1. Why might rising prices stimulate short-run production but have no effect on long-run...
Suppose the consumption function is C = $400 billion + 0.8Y and the government wants to stimulate the economy
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The table gives the aggregate demand schedule, the short run aggregate supply schedule, and the long run aggregat...
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The following graph shows the short-run aggregate supply curve (AS), the aggregate demand curve (AD), and the long-run aggregate supply curve (LRAS) for a hypothetical economy
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15. The short-run aggregate supply curve will shift to the: right if commodity prices i...
15.
The short-run aggregate supply curve will shift to the:
right if commodity prices increase.
left if productivity increases.
left if nominal wages increase.
right if government spending increases.
35.
An expansionary fiscal policy either _____ government spending
or _____ taxes.
decreases; increases
decreases; decreases
increases; decreases
increases; increases
12.
The short run in macroeconomic analysis is a period:
in which many production costs can be taken as fixed.
in which interest rates are fixed.
of two months, and the...
Using aggregate demand (AD), short-run aggregate supply (SRAS) and long-run aggregate supply (LRAS) curves
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In the short run the classical production function is concave. What property best explains why? a...
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The graph shows the economy in long-run equilibrium Then the world economy expands and the demand...
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6. Why the aggregate supply curve slopes upward in the short run In the short run,...
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32. The rational expectations hypotheses implies that discretionary macroeconomic policy is: a. relatively effective in both...
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Closed Economy In the Short Run. I have solved (a) but confused on how to solve...
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Run. I have solved (a) but confused on how to solve the rest.
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15.
The short-run aggregate supply curve will shift to the:
right if commodity prices increase.
left if productivity increases.
left if nominal wages increase.
right if government spending increases.
35.
An expansionary fiscal policy either _____ government spending
or _____ taxes.
decreases; increases
decreases; decreases
increases; decreases
increases; increases
12.
The short run in macroeconomic analysis is a period:
in which many production costs can be taken as fixed.
in which interest rates are fixed.
of two months, and the...
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Closed Economy In the Short
Run. I have solved (a) but confused on how to solve the rest.
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