Homework Answers
20. Option 1. Be close to or at its potential GDP
Explanation: Potential GDP is the long-run production capacity of an economy when resources are fully employed.
21. Option 1. Be close or on the vertical part of the AS curve.
Explanation: The vertical part of the AS curve indicates the potential GDP.
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Question 20 1 pts In the long run, real GDP will be close to or at...
This Question: 1 pt 5 of 12 (1 complete) This Test: 12 pts poss The table...
This Question: 1 pt 5 of 12 (1 complete) This Test: 12 pts poss The table shows aggregate demand and short-run aggregate supply in Japan. Potential GDP is 600 trilion yen. Price level (GDP price index) 1401 Price level (GDP price index) 75 105 135 Real GDP demanded Real GDP supplied trillions of 2005 yen) 600 450 300 400 550 700 Use the data to draw the aggregate demand curve and the aggregate supply curve. Label the curves. Draw the...
The long-run aggregate supply curve is vertical because Select one: a. potential GDP is independent of...
The long-run aggregate supply curve is vertical because Select one: a. potential GDP is independent of the price level. ob. actual output can never exceed, even temporarily, the output rate implied by the economy's long-run aggregate supply curve. c. a vertical long-run aggregate supply curve indicates the maximum output rate that an economy can ever reach. d. a vertical long-run supply curve indicates that an increase in aggregate demand will lead to a
Long run aggregate supply is the relationship between the quantity of real GDP supplied and the...
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...
Question 43 5 pts If the Money Supply (M) is $10 billion, real GDP (Q) is...
Question 43 5 pts If the Money Supply (M) is $10 billion, real GDP (Q) is $20 billion, and the Price Level (P) is 2.0, then the velocity of money (V) is: 2. 40. 20. 4. --------------------------- Question 44 5 pts Which of the following does NOT explain the downward slope of the aggregate demand curve? The real balance (wealth) effect The multiplier effect The international trade effect The interest rate effect Question 45 5 pts An increase in household...
QUESTION 25 Which of the following best describes the long run in terms of aggregate supply?...
QUESTION 25 Which of the following best describes the long run in terms of aggregate supply? a. The long-run aggregate supply curve is horizontal. b. The long-run aggregate supply slopes upwards, but is NOT vertical. c. The long-run aggregate supply slopes downwards. d. The long-run aggregate supply curve is vertical. Question 39 Which of the following best characterizes market equilibrium? a. when there is no incentive for consumers or producers to change their current behaviour b. when producers earn profits...
Number 2. If the price level increases to 107 then youur s Question Completion Status The economy enters the long-run once: O Nominal wages become real wages o Real wages become nominal wages suff...
Number 2. If the price level increases to 107 then
youur
s Question Completion Status The economy enters the long-run once: O Nominal wages become real wages o Real wages become nominal wages sufficient time has elapsed for wage contracts to expire and nominal wage to adj O Sufficient time has elapsed for real GDP to increase and unemployment to decrea QUESTION 3 Assume that initially your nominal wage was $16 an hour and the price index was 100 O...
The Long-Run Aggregate Supply Curve: is vertical at the physical limit of the economy. is upward...
The Long-Run Aggregate Supply Curve: is vertical at the physical limit of the economy. is upward sloping. is horizontal. is vertical at potential GDP
Question 20 (6 points) Suppose full employment real GDP is $1,000 billion and the money supply...
Question 20 (6 points) Suppose full employment real GDP is $1,000 billion and the money supply is $800 billion. Suppose also that the monetary velocity is constant and equal to 5. What is the price level? _.00 Now suppose the Fed increases the money supply by 4% and potential real GDP rises by 3%. In the long run, the inflation rate would be _.00% A/
What is potential GDP? O A) It is the level of real GDP in the long...
What is potential GDP? O A) It is the level of real GDP in the long run. OB) It is the difference between current GDP and maximum GDP. O C ) It is the level of real GDP in the short run. O D) It is the level of GDP at which inflation is constant.
What does the vertical slope of the long-run aggregate supply curve mean? no matter what the...
What does the vertical slope of the long-run aggregate supply curve mean? no matter what the Real GDP, the price level is always the same Real GDP always increases and never falls Real GDP always converges to the same value in the long run The price level is not a factor determining long-run aggregate supply
This Question: 1 pt 5 of 12 (1 complete) This Test: 12 pts poss The table shows aggregate demand and short-run aggregate supply in Japan. Potential GDP is 600 trilion yen. Price level (GDP price index) 1401 Price level (GDP price index) 75 105 135 Real GDP demanded Real GDP supplied trillions of 2005 yen) 600 450 300 400 550 700 Use the data to draw the aggregate demand curve and the aggregate supply curve. Label the curves. Draw the...
The long-run aggregate supply curve is vertical because Select one: a. potential GDP is independent of the price level. ob. actual output can never exceed, even temporarily, the output rate implied by the economy's long-run aggregate supply curve. c. a vertical long-run aggregate supply curve indicates the maximum output rate that an economy can ever reach. d. a vertical long-run supply curve indicates that an increase in aggregate demand will lead to a
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...
Number 2. If the price level increases to 107 then
youur
s Question Completion Status The economy enters the long-run once: O Nominal wages become real wages o Real wages become nominal wages sufficient time has elapsed for wage contracts to expire and nominal wage to adj O Sufficient time has elapsed for real GDP to increase and unemployment to decrea QUESTION 3 Assume that initially your nominal wage was $16 an hour and the price index was 100 O...
The Long-Run Aggregate Supply Curve: is vertical at the physical limit of the economy. is upward sloping. is horizontal. is vertical at potential GDP
Question 20 (6 points) Suppose full employment real GDP is $1,000 billion and the money supply is $800 billion. Suppose also that the monetary velocity is constant and equal to 5. What is the price level? _.00 Now suppose the Fed increases the money supply by 4% and potential real GDP rises by 3%. In the long run, the inflation rate would be _.00% A/
What is potential GDP? O A) It is the level of real GDP in the long run. OB) It is the difference between current GDP and maximum GDP. O C ) It is the level of real GDP in the short run. O D) It is the level of GDP at which inflation is constant.
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