Homework Answers
Ans) 1) An increase in price level will cause movement along the curve.
Option c.
2) When input price decreases, production becomes cheaper, SRAS increases and curve shifts to the right.
Option a.
3) If firms and workers expect price level to fall, they will negotiate contracts at lower nominal wage and this decreases the cost of production. SRAS shifts to the right.
Option a.
4) Decrease in price level will cause movement along the curve.
Option c.
5) It will cause leftward shift in LRAS. And when LRAS shifts, SRAS shifts too. SRAS decreases i.e shifts leftward.
Option b.
6) Increase in labor force will increase LRAS and hence SRAS. SRAS will shift to the right.
Option a.
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Part 4 (1 point) 01 Question (6 points) Determine whether the following changes cause short-run aggregate...
1. Describe and briefly explain whether the following changes cause the short-run aggregate suppl...
1. Describe and briefly explain whether the following changes cause the short-run aggregate supply to increase, decrease or nether: a. The price level increases b. Input prices decrease c. Firms and workers expect the price level to fall d. The price level decreases e. New policies increase the cost of meeting government regulations f. The number of workers in the labor force increases
1. Describe and briefly explain whether the following changes cause the short-run aggregate supply to increase, decrease...
At points on the short-run aggregate supply curve, but to the right of the long-run aggregate...
At points on the short-run aggregate supply curve, but to the right of the long-run aggregate supply curve, resources are: A. over-utilized, making it more likely that the short-run aggregate supply curve will shift up (to the left) B. over-utilized, making it more likely that the short-run aggregate supply curve will shift down (to the right) ° C. under-utilized, making it more likely that the short-run aggregate supply curve will shift up (to the left) D. under-utilized, making it more...
QUESTION 6 The aggregate demand curve would shift to the right as a result of a...
QUESTION 6 The aggregate demand curve would shift to the right as a result of a drop in the foreign exchange value of the dollar. a decrease in the amount of money in circulation. a drop in the price level. tax increases. QUESTION 16 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 price level will fall. real GDP will...
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....
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...
1. Which of the following is not a property of the aggregate demand curve? It shows...
1. Which of the following is not a property of the aggregate demand curve? It shows the relationship between the overall price level and level consumption. It shows the price level on the vertical axis and output on the horizontal axis. The aggregate demand curve slopes downward. It shows the relationship between the overall price level and the level of total demand. 2. When the price level increases people: feel more wealthy. have the same real value of assets, regardless...
Which of the following will most likely cause a decrease in short-run aggregate supply (leftward shift) in the goods and services market?
35. Which of the following will most likely cause a decrease in short-run aggregate supply (leftward shift) in the goods and services market? a. An increase in the productivity of labor b. A reduction in the price of crude oil, a major imported commodity c. An increase in resource prices d. Favorable weather conditions in agricultural areas. 36. The vertical long-run aggregate supply curve reflects the fact that in the long run, an increase in the price level. a. Will not alter the economy's maximum...
Aggregate Demand and Aggregate Supply Work It Out: Question 2 of 4 Determine whether each of the following events cause...
Aggregate Demand and Aggregate Supply Work It Out: Question 2 of 4 Determine whether each of the following events causes a shift of a curve or a movement along a curve in the short run Indicate which curve is involved and the direction of the change. An increase in the quantity of money by the Federal Reserve increases the quantity of money that people wish to lend lowering interest rates. This will cause a the aggregate curve to the
1. . (Figure: Determining SRAS Shifts) If there are advances in technology, the short-run aggregate supply...
1.
.
(Figure: Determining SRAS Shifts) If there are advances in
technology, the short-run aggregate supply curve will shift from
SRAS0 to _____ and the price level will shift to
_____.
SRAS1; P0
SRAS2; P2
SRAS2; P1
SRAS1; P1
2.
Simultaneous recession and deflation can be explained by:
a decrease in aggregate supply.
an increase in aggregate supply.
a decrease in aggregate demand.
an increase in aggregate demand.
3.
Which is a determinant of aggregate supply?
household expectations
prices of...
14 Question (1 point) The following figure depicts the aggregate demand curve (AD), the short-run aggregate...
14 Question (1 point) The following figure depicts the aggregate demand curve (AD), the short-run aggregate supply curve (SRAS), and the long-run aggregate supply curve (LRAS) for the United States. The economy is initially at long-run equilibrium, at point A. In addition to the crash of the stock market and a subsequent fall in expected future income, the Great Depression was also partially caused by a change in legislation regarding trade. In 1930, Congress passed the Smoot-Hawley Tariff Act. This...
1. Describe and briefly explain whether the following changes cause the short-run aggregate supply to increase, decrease or nether: a. The price level increases b. Input prices decrease c. Firms and workers expect the price level to fall d. The price level decreases e. New policies increase the cost of meeting government regulations f. The number of workers in the labor force increases
1. Describe and briefly explain whether the following changes cause the short-run aggregate supply to increase, decrease...
At points on the short-run aggregate supply curve, but to the right of the long-run aggregate supply curve, resources are: A. over-utilized, making it more likely that the short-run aggregate supply curve will shift up (to the left) B. over-utilized, making it more likely that the short-run aggregate supply curve will shift down (to the right) ° C. under-utilized, making it more likely that the short-run aggregate supply curve will shift up (to the left) D. under-utilized, making it more...
QUESTION 6 The aggregate demand curve would shift to the right as a result of a drop in the foreign exchange value of the dollar. a decrease in the amount of money in circulation. a drop in the price level. tax increases. QUESTION 16 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 price level will fall. real GDP will...
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...
Aggregate Demand and Aggregate Supply Work It Out: Question 2 of 4 Determine whether each of the following events causes a shift of a curve or a movement along a curve in the short run Indicate which curve is involved and the direction of the change. An increase in the quantity of money by the Federal Reserve increases the quantity of money that people wish to lend lowering interest rates. This will cause a the aggregate curve to the
1.
.
(Figure: Determining SRAS Shifts) If there are advances in
technology, the short-run aggregate supply curve will shift from
SRAS0 to _____ and the price level will shift to
_____.
SRAS1; P0
SRAS2; P2
SRAS2; P1
SRAS1; P1
2.
Simultaneous recession and deflation can be explained by:
a decrease in aggregate supply.
an increase in aggregate supply.
a decrease in aggregate demand.
an increase in aggregate demand.
3.
Which is a determinant of aggregate supply?
household expectations
prices of...
14 Question (1 point) The following figure depicts the aggregate demand curve (AD), the short-run aggregate supply curve (SRAS), and the long-run aggregate supply curve (LRAS) for the United States. The economy is initially at long-run equilibrium, at point A. In addition to the crash of the stock market and a subsequent fall in expected future income, the Great Depression was also partially caused by a change in legislation regarding trade. In 1930, Congress passed the Smoot-Hawley Tariff Act. This...
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