Answer
the short-run equilibrium is at SRAS=AD and long-run equilibrium is
at SRAS=AD=LRAS
the short-run equilibrium real output is less than the long-run
equilibrium output then there is a recessionary gap and an
expansionary policy is used to stabilize the economy and increase
AD to the full employment level of output.
Option D
Panel (b) and Panel (d)
QUESTION 32 Use the following diagrams to answer question LRAS, SRAS, AD, AD 0 Y, Y xit Panel (a) P LRAS, SRAS, SRAS AD Panel (c) Panel (d) In Panel (d), which of the following statements is not correct? A. At E1, the economy is at full employment. B. At E2, unemployment rate rises and jobs are scarce. C. At E1, the economy faces a stagdeflation crisis. D. At E2, the economy faces a stagflation crisis.
Help me with this! Thank you! SRAS: LRAS SRAS, P P ES P AD AD Y GDP According to the graph shown, what does P on the y-axis stand for? Multiple Choice Inflation rate Average price level Price of GDP Price of Y in the short run, but When the Fed conducts expansionary monetary policy, it in the long run. Multiple Choice causes inflation; boosts output boosts demand; boosts supply causes Inflation; boosts economic growth boosts demand; causes inflation One...
Price Level LRAS SRAS AD AD AD Yo Y Yo Yo If the economy in the graph shown is currently at point B, and the government enacts contractionary fiscal policy, in the short run the economy will most likely move to point Multiple Choice o o It is likely to be unaffected and stay at point B o o
Por CPI LRAS, SRAS, AD AD, AD Y, Үр Ү, Yor Real GDP Suppose the economy is producing the output level Yp, and a positive demand shock shifts the AD, curve to AD2. The economy now has __ A. a recessionary gap and expansionary fiscal policy can close the gap. B. an inflationary gap and expansionary fiscal policy can close the gap. C. a recessionary gap and contractionary fiscal policy can close the gap. D. an inflationary gap and contractionary...
Figure: Monetary Policy 2 LRAS SRAS C Price level a AD b yf Real GDP Goods and services market Refer to Figure: Monetary Policy 2. If an economy operates in the short run at point a, then if the government were to raise the required reserve ratio, then we should expect a/an decrease in SRAS, which moves the economy toward point. Уf Real GDP Goods and services market Refer to Figure: Monetary Policy 2. If an economy operates in the...
Use the following to answer questions 6-7: Figure: Determining Fiscal Policy LRAS SRAS AD Aggregate Price Level (P) Aggregate Output (Q) 6. (Figure: Determining Fiscal Policy) Expansionary fiscal policies could: A) move the economy to full employment. B) move the economy away from full employment. C) lead to a lower price level. D) lead to a lower price level and lower unemployment. 7. (Figure: Determining Fiscal Policy) The best discretionary fiscal policy option is: A) expansionary fiscal policy that leads...
Question Completion Status: Panel (b) Panel (a) Price level Price leve SRAS АО, AD AD2 AD, AD, Real GDP Real GDR Panel (d) Panel (c) Price level Price level SRAS SRAS SRAS SRAS AD, AD, Real GDP Real GDFP A Panel a B. Panel b C. Panel c D. Panel d Suppose Congress tries to balance the government's budget by cutting Government spending. Which of the graphs shows the impact of this policy? (Assume Y1 is the initial equilibrium.)
LRAS SRAS с Price level AD b Уf Real GDP Goods and services market Refer to Figure: Fiscal Policy 2. If an economy operates in the short run at point a, then if the government were to implement contractionary fiscal policy. then we should expect a/an decrease in SRAS, which moves the economy toward pointc. increase in AD, which moves the economy toward point decrease in AD, which moves the economy toward point b. ZIL P Yf Real GDP Goods...
2. (12 marks) Use a AD/AS diagram to illustrate the use of expansionary monetary policy to close an expansionary gap. a. Label the axes. b. Label the lines. And show the expansionary gap with the LRAS c. Show the new AD line after the expansionary monetary policy is applied. d. Briefly explain what your diagram shows. e. Explain what monetary policies impact. LRAS SRAS Poh t AD2 recessiona
Figure: Effects of Contractionary Fiscal Policies LRAS SRAS AD Aggregate Output (Q) ot t Expansionary fiscal policy should be used to ensure a higher price level Contractionary fiscal policies should be used to reduce inflation Contractionary fiscal policy should be used to ensure a higher price level Expansionary fiscal policy should be used to increase aggregate demand Which of the following statements is true regarding the diagram above