Answer
option B
The long-run GDP is a potential output that is produced using all
the resources and technology in the economy so it can change if
there is a change in the resources or technology or both and
anything else can not change it, like price level.
The increase in inn price level does not change the potential real
GDP.
Concept: Price Effects on LRAS Concept: Price Effect on LRAS Question Help How does an increase...
How does cost push inflation begin? A cost-push inflation begins with as the result of an increase in the money wage rate or an increase in the money prices of raw materials O A. an increase in aggregate demand OB. a decrease in short-run aggregate supply O C. an increase in short-run aggregate supply OD. a decrease in aggregate demand Explain for each event whether it changes the quantity of real GDP supplied, short-run aggregate supply, long run aggregate supply,...
Question 56 (1 point) Consider the aggregate supply-aggregate demand model. How does an increase in aggregate demand affect the unemployment rate and the inflation rate? LRAS: SRAS Price level (GDP deflator 2009 = 100) AD AD AD GDP, GDP, GDP AD AD AD2 GDP, GDP, GDP; Real GDP (trillions of 2009 dollars) The unemployment rate decreases and the inflation rate increases. ia The unemployment rate increases and the inflation rate decreases. Both the unemployment rate and the inflation rate increase....
The accompanying graph shows the relationship between the average annual increase in the price level and the average annual increase in money supply across eight countries. 45-degree I Harpoglia a. What concept, related to monetary policy, does this graph help demonstrate? Valko Cherbani O Ragnar Nurkse's balanced growth theory O the liquidity preference model O buffer theory O convergence hypothesis Caz Resa Tyndaria Harnnastas Veckram eGonmorl'n monetary neutrality Increase in money supply (%) Use the concept or model identified in...
Long run aggregate supply is the relationship between the quantity of real GDP supplied and the price level when the maintain full employment changes in step with the price level to O A. money wage rate OB. quantity of money OC. real wage rate OD. interest rate supplied and the when the money wage rate, the prices of other resources and Short run aggregate supply is the relationship between the quantity of potential GDP remain constant O A real GDP...
Suppose the Bank of Canada raises the overnight loans rate. Describe the ripple effects of this monetary policy. Other short-term interest rates and the exchange rate Consumption expenditure, investment, and net exports The quantity of money and supply of loanable funds Aggregate demand Real GDP growth and the inflation rate O A. rise; increase OB. fall; decrease O c. fall; increase OD. rise; decrease O A. decreases; decrease OB. increases; decrease or remain the same O c. decreases; increase or...
The graph below depicts the aggregate demand, Irrun aggregate supply, and short-run aggregate supply curves for the United States at an initial long-run macroeconomic equilibrium Price level] (P) LRAS SRAS Real GDP Consider a situation in which two things happen simultaneously: there is a deterioration of institutions, and the federal government massively increases spending. Which of the graphs below illustrates the shifts in this model given this situation? Price level Price level (P) (P) URAS LRAS, LRAS SRAS SRAS SRAS...
Chinese Premier Wen Jiabao has wamed Japan that its companies operating in China should raise the pay for their workers. Explain how a rise in wages in China wil influence the quantity of real GDP supplied and aggregate supply in China A rise in wages in China O A. decreases China's short-run aggregate supply and the quantity of real GDP supplied does not change O B. decreases China's long-run aggregate supply with no change in short-run aggregate supply O C....
graph requires adjustment Question 8 of 16 > The accompanying graphs illustrate an initial equilibrium for the economy. Suppose that a snowstorm destroys a large number of corn crops. Use the graphs to show the new positions of aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS) in both the short-run and the long-run, as well as the short-run (Esr) and long-run (Eur) equilibria resulting from this change. Then answer what happens to the price level and...
The table gives the aggregate demand schedule, the short run aggregate supply schedule, and the long run aggregate supply schedule for an economy What is the quantity of real GDP at the short-run macroeconomic equilibrium? Price level (GDP deflator) The quantity of real GDP at the short-run macroeconomic equilibrium is s billion 100 Real GDP Real GDP Real GDP supplied supplied demanded in short run in long run (billions of 2007 dollars) 200 500 350 500 500 500 400 650...
Concept Check Question 3.1 Concept Check Question 3.1 If the economy adjusts through the automatic mechanism, then a decline in aggregate demand causes O A. an expansion in the short run and an increase in the price level in the long run. O B . an expansion in the short run and a decline in the price level in the long run. O C. a recession in the short run and an increase in the price level in the long...