Homework Answers
39) Horizontal axis shows real GDP and not nominal. Shift of AD to the right is not the result of price level increase because this would cause a movement and not a shift. Graph A shows change in AD only affects price level. Economy can be at Y2 in short run. There is a tradeoff between inflation and employment. The correct choice is E
40) Horizontal axis shows real GDP and not nominal. Shift of AD occurs to the right which happens when there is an expansionary policy and not contractionary. There is a tradeoff between inflation and employment. The correct choice is D
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LAS Real GDP LAS Price level Real GDP 39. Refer to the figure above to answer...
Figure AS-AD.1 AD2 AD1 AD3 Real Domestic Output, GDP 13) In Figure AS.AD.1, what combination would...
Figure AS-AD.1 AD2 AD1 AD3 Real Domestic Output, GDP 13) In Figure AS.AD.1, what combination would most likely cause a shift from ADI to AD2? A) A decrease in taxes and an increase in government purchases B) An increase in taxes and an increase in government purchases 14) Other things being equal, the effects of an increase in the price of orange juice would best be represented by a(n): A) upward movement along the demand curve for orange juice. B)...
Investment Demand 0 $75 150 225 Investment (s) 0 $50 100 150 Investment (S) AS $150) AD, (I-$100) Real GDP Refer to the graphs above, in which the numbers in parentheses near the AD1, AD2, and A...
Investment Demand 0 $75 150 225 Investment (s) 0 $50 100 150 Investment (S) AS $150) AD, (I-$100) Real GDP Refer to the graphs above, in which the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the levels of investment spending associated with each curve. All figures are in billions. What is the desired level of investment spending in this economy if it is to achieve a noninflationary full-employment level of real GDP? investment spending associated with...
Figure: AD–AS Refer to Figure: AD–AS. Assume that the economy is in long-run equilibrium. If the...
Figure:
AD–AS
Refer to Figure: AD–AS. Assume that the economy
is in long-run equilibrium. If the Federal Reserve were to lower
the targeted federal funds rate we would most likely expect:
there will be a downward movement along the aggregate demand
curve AD1.
the aggregate demand curve will stay unchanged at
AD1.
the aggregate demand curve will shift to
AD3.
the aggregate demand curve will shift to
AD2.
LRAS Aggregate price level SRAS AD, AD AD, Y₂ YpY, Real GDP
LAS SAS2 130 SAS 120 SASO Price level (GDP deflator, 2000 = 100) 110 А B...
LAS SAS2 130 SAS 120 SASO Price level (GDP deflator, 2000 = 100) 110 А B 100 F AD2 AD ADO O 6 8 10 12 14 16 Real GDP (trillions of 2000 dollars) If instead the government decides not to interfere with the economy and let the economy recover by itself, then__---, causing__---- 1) workers renegotiate their wages; ADO to shift to AD1. 2) workers renegotiate their wages; SASO to shift to SAS1. 3) workers renegotiate their wages; SAS1...
LAS AO Price Pure SAS level v Real GOP Refer to figure 3 above 2) The...
LAS AO Price Pure SAS level v Real GOP Refer to figure 3 above 2) The economy Is In a short run equilibrium at 01, which is to the left of OF {full employment level of real output). What is the mostly like concern of policy makers A. Rising price levels B. An excess of externalities in the market C. High levels of unemployment D. Crowding our as result of high budget defecits E. An overallocation of scarce resources creating...
Relative price Relative price (1) Nominal output (2) Real output Price level Price level (3) Nominal...
Relative price Relative price (1) Nominal output (2) Real output Price level Price level (3) Nominal output Real output Which of the graphs correctly labels the axes of the AS-AD model? A) Graph (1) B) Graph (2) C) Graph (3) D) Graph (4) Question 60 (2 points) If a nation's annual real GDP growth rate is 2.5% we can expect real GDP to double in about -----years. Enter your answer as a whole number (answers ending in 0.5 or higher...
150 Price level (GDP defa 200/100 LAS 140 SAS How does an increase in autonomous expenditure...
150 Price level (GDP defa 200/100 LAS 140 SAS How does an increase in autonomous expenditure change real GDP in the short run? Does real GDP charge by the same amount as the change in aggregate demand? Why or why not? Use the graph to answer these questions AD, is the aggregate demand curve when investment is $10 milion Investment increases to $1.5 trilion, and the multiplier when the price level is constantis Draw the new aggregate demand curve and...
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
LAS SAS2 || 130 SAS C 120 SASO Price level (GDP deflator, 2000 = 100) 110...
LAS SAS2 || 130 SAS C 120 SASO Price level (GDP deflator, 2000 = 100) 110 A 100 AD2 90 AD1 0 6 ADO 8 10 12 16 Real GDP (trillions of 2000 dollars) 14 After the surprise above, the government would try to stimulate the economy by 1) shifting ADO to AD1. 2) shifting SASO to SAS1. 3) shifting ADO to AD1 and SASO to SAS1. 4) shifting ADO leftward
LAS Price AO Figure 3 SAS level Q QF Real GOP Refer to figure 3 above...
LAS Price AO Figure 3 SAS level Q QF Real GOP Refer to figure 3 above N) The economy is in a short run equilibrium at 01, which is to the left of OF (full employment level of real output). What is the mostly like concern of policy makers-- A Rising price levels B. An excess of externalities in the market C. High levels of unemployment 0. Crowding out as result of high budget defects 3. An overallocation of scarce...
Figure AS-AD.1 AD2 AD1 AD3 Real Domestic Output, GDP 13) In Figure AS.AD.1, what combination would most likely cause a shift from ADI to AD2? A) A decrease in taxes and an increase in government purchases B) An increase in taxes and an increase in government purchases 14) Other things being equal, the effects of an increase in the price of orange juice would best be represented by a(n): A) upward movement along the demand curve for orange juice. B)...
Investment Demand 0 $75 150 225 Investment (s) 0 $50 100 150 Investment (S) AS $150) AD, (I-$100) Real GDP Refer to the graphs above, in which the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the levels of investment spending associated with each curve. All figures are in billions. What is the desired level of investment spending in this economy if it is to achieve a noninflationary full-employment level of real GDP? investment spending associated with...
Figure:
AD–AS
Refer to Figure: AD–AS. Assume that the economy
is in long-run equilibrium. If the Federal Reserve were to lower
the targeted federal funds rate we would most likely expect:
there will be a downward movement along the aggregate demand
curve AD1.
the aggregate demand curve will stay unchanged at
AD1.
the aggregate demand curve will shift to
AD3.
the aggregate demand curve will shift to
AD2.
LRAS Aggregate price level SRAS AD, AD AD, Y₂ YpY, Real GDP
LAS SAS2 130 SAS 120 SASO Price level (GDP deflator, 2000 = 100) 110 А B 100 F AD2 AD ADO O 6 8 10 12 14 16 Real GDP (trillions of 2000 dollars) If instead the government decides not to interfere with the economy and let the economy recover by itself, then__---, causing__---- 1) workers renegotiate their wages; ADO to shift to AD1. 2) workers renegotiate their wages; SASO to shift to SAS1. 3) workers renegotiate their wages; SAS1...
LAS AO Price Pure SAS level v Real GOP Refer to figure 3 above 2) The economy Is In a short run equilibrium at 01, which is to the left of OF {full employment level of real output). What is the mostly like concern of policy makers A. Rising price levels B. An excess of externalities in the market C. High levels of unemployment D. Crowding our as result of high budget defecits E. An overallocation of scarce resources creating...
Relative price Relative price (1) Nominal output (2) Real output Price level Price level (3) Nominal output Real output Which of the graphs correctly labels the axes of the AS-AD model? A) Graph (1) B) Graph (2) C) Graph (3) D) Graph (4) Question 60 (2 points) If a nation's annual real GDP growth rate is 2.5% we can expect real GDP to double in about -----years. Enter your answer as a whole number (answers ending in 0.5 or higher...
150 Price level (GDP defa 200/100 LAS 140 SAS How does an increase in autonomous expenditure change real GDP in the short run? Does real GDP charge by the same amount as the change in aggregate demand? Why or why not? Use the graph to answer these questions AD, is the aggregate demand curve when investment is $10 milion Investment increases to $1.5 trilion, and the multiplier when the price level is constantis Draw the new aggregate demand curve and...
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
LAS SAS2 || 130 SAS C 120 SASO Price level (GDP deflator, 2000 = 100) 110 A 100 AD2 90 AD1 0 6 ADO 8 10 12 16 Real GDP (trillions of 2000 dollars) 14 After the surprise above, the government would try to stimulate the economy by 1) shifting ADO to AD1. 2) shifting SASO to SAS1. 3) shifting ADO to AD1 and SASO to SAS1. 4) shifting ADO leftward
LAS Price AO Figure 3 SAS level Q QF Real GOP Refer to figure 3 above N) The economy is in a short run equilibrium at 01, which is to the left of OF (full employment level of real output). What is the mostly like concern of policy makers-- A Rising price levels B. An excess of externalities in the market C. High levels of unemployment 0. Crowding out as result of high budget defects 3. An overallocation of scarce...
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