Homework Answers
Option B.
A decrease in political stability will decrease the level of aggregate supply in the economy because producers will be in doubt whether the quantity produced will be sold or not and thus they will reduce the level of quantity supplied at each price level which will shift the aggregate supply curve leftwards. Thus, a decrease in political stability will lead to leftward shift of the aggregate supply curve of the economy.
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Question 7 (3 points) AS2 AS1 AS3 Price Level AD Q₂Q, Q3 Real Domestic Output Which...
AS, AS, (н Price Level E AD AD 0 A B C Real Domestic Output A...
AS, AS, (н Price Level E AD AD 0 A B C Real Domestic Output A shift of the aggregate demand curve from AD, to AD, might be caused by a(n). OA) increase in investment spending B) decrease in the amount of output supplied C) increase in aggregate supply D) decrease in net export spending Which of the following statements is correct? A) A bank can only grant loans to customers if it has excess reserves. B) When borrowers repay...
Price level AD AD & Q2 Q3 Real domestic output, GDP In class, we said that...
Price level AD AD & Q2 Q3 Real domestic output, GDP In class, we said that prices are sticky downward. If that is so, why would price fall from P3 to P2 on this graph? (The answer should be one sentence or two at most)
Macroeconomics
Q1) agregate supply shocks ( shift of the AS curve) cause the price level and real GDP to move in the same direction. True or False?Q2) An increase in the domestic price level will cause the AD curve to shift to the left. True or False?Q3)From the list below, choose ONE answer that best describes what would occur INITIALLY in the following AD (aggregate demand) AS (aggregate supply)" situation(s). a) Inflation erodes the real value of financial wealth, causing consumers to decrease spending.b)As a...
Use the following graph to answer the next question. Price Level AD2 AD AD Real Domestic...
Use the following graph to answer the next question. Price Level AD2 AD AD Real Domestic Output, GDP What combination would most likely cause a shift from AD, to AD2? A) An increase in taxes and an increase in government purchases A decrease in taxes and an increase in government purchases A decrease in taxes and a decrease in government purchases D) An increase in taxes and no change in government purchases
What reference? Name: For each of the following events, use an AD-AS diagram to show the...
What reference?
Name: For each of the following events, use an AD-AS diagram to show the short-run and long-run effects on output and the price level (inflation rate); identify any output gap. Assume the economy starts in long run equilibrium. (1) The government reduces income taxes AS P AD (2) A decrease in consumer confidence leads to lower consumption spending AS P. AD AD-AS practice assignment.pdf 2/2 (3) The Fed decreases the money supply AS Pe K AD y* (4)...
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...
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...
What would cause the BOTH the price level to decrease and real GDP to decrease? O...
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 to the right of the SRAS curve a shift to the left of the SRAS curve a shift to the right of the AD curve Question 6 (2 points) When there is an increase in aggregate demand along a stationary upward sloping short run in the short run. and aggregate supply curve, the...
Question 21 1 pts Use the following table which shows the aggregate demand and aggregate supply...
Question 21 1 pts Use the following table which shows the aggregate demand and aggregate supply schedule for a hypothetical economy to answer the next question. Real Domestic Output Demanded Price Level Real Domestic Output Supplied (in billions) (index value) (in billions) $3,000 350 $9,000 4,000 300 8,000 5,000 250 7,000 6,000 200 6,000 7,000 150 5,000 8,000 100 4,000 At the price level of 150, there will be a general surplus in the economy, and output supplied will decrease...
Which would most likely shift the aggregate supply curve? A change in the prices of _____....
Which would most likely shift the aggregate supply curve? A change in the prices of _____. domestic products foreign products financial assets resources A decrease in aggregate demand in the short run will reduce _____. both real output and the price level the price level and increase the real domestic output the real domestic output and have no effect on the price level the price level and have no effect on real domestic output The economy's long-run AS curve assumes...
AS, AS, (н Price Level E AD AD 0 A B C Real Domestic Output A shift of the aggregate demand curve from AD, to AD, might be caused by a(n). OA) increase in investment spending B) decrease in the amount of output supplied C) increase in aggregate supply D) decrease in net export spending Which of the following statements is correct? A) A bank can only grant loans to customers if it has excess reserves. B) When borrowers repay...
Price level AD AD & Q2 Q3 Real domestic output, GDP In class, we said that prices are sticky downward. If that is so, why would price fall from P3 to P2 on this graph? (The answer should be one sentence or two at most)
Use the following graph to answer the next question. Price Level AD2 AD AD Real Domestic Output, GDP What combination would most likely cause a shift from AD, to AD2? A) An increase in taxes and an increase in government purchases A decrease in taxes and an increase in government purchases A decrease in taxes and a decrease in government purchases D) An increase in taxes and no change in government purchases
What reference?
Name: For each of the following events, use an AD-AS diagram to show the short-run and long-run effects on output and the price level (inflation rate); identify any output gap. Assume the economy starts in long run equilibrium. (1) The government reduces income taxes AS P AD (2) A decrease in consumer confidence leads to lower consumption spending AS P. AD AD-AS practice assignment.pdf 2/2 (3) The Fed decreases the money supply AS Pe K AD y* (4)...
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 to the right of the SRAS curve a shift to the left of the SRAS curve a shift to the right of the AD curve Question 6 (2 points) When there is an increase in aggregate demand along a stationary upward sloping short run in the short run. and aggregate supply curve, the...
Question 21 1 pts Use the following table which shows the aggregate demand and aggregate supply schedule for a hypothetical economy to answer the next question. Real Domestic Output Demanded Price Level Real Domestic Output Supplied (in billions) (index value) (in billions) $3,000 350 $9,000 4,000 300 8,000 5,000 250 7,000 6,000 200 6,000 7,000 150 5,000 8,000 100 4,000 At the price level of 150, there will be a general surplus in the economy, and output supplied will decrease...
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