In the long run, when wages rise, the price level ________________ and equilibrium output _______________.
falls; rises
rises; falls
rises; rises
None of the listed options is correct.
falls; falls
In the long run, when wages rise, the price level ________________ and equilibrium output _______________. falls;...
Other things constant, when nominal wages fall, the and the equilibrium price level -__ (Assume household wealth does NOT change as a result of the decrease in wages.) Short Run Aggregate Supply curve shifts right, falls. Aggregate Demand curve shifts right; falls. Short Run Aggregate Supply curve shifts left: rises. Aggregate Demand curve shifts left: rises.
The long-run equilibrium level of output is determined by (changes in the price level, consumer demand, capital, labor, and technology); Therefore it will (increase to a new equilibrium, remain at the full-employment level, decrease to a new equilibrium) if the aggregate demand curve shifts to the right. 5. The long-run aggregate supply curve Aa Aa Suppose the hypothetical economy of Larryopia produces real GDP of $40 billion when unemployment is at its natural rate. Use the purple line (diamond symbols)...
The following graph shows the economy in long-run equilibrium at the expected price level of 120 and the natural level of output of $600 billion. Suppose a sudden and severe contraction in the housing market reduces the value of homes and causes consumers to spend less.Shift the short-run aggregate supply (AS) curve or the aggregate demand (AD) curve to show the short-run impact of the housing market slump.In the short run, the decrease in consumption spending associated with the housing...
Starting from short-run equilibrium, the following occurs: personal income taxes rise and foreign real national income rises. What is the effect on the price level and Real GDP in the short run? a) The price level rises and Real GDP falls. b) The price level falls and Real GDP falls. c) The price level rises and Real GDP rises. d) The price level falls and Real GDP rises. e) There is not enough information to answer this question.
Pessimism Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time. Refer to Pessimism. In the short run what happens to the price level and real GDP? Group of answer choices Both the price level and real GDP fall. Both the price level and real GDP rise. The price level rises and real GDP falls....
24 the changes in prices and output that occur in the long run. changes in wages, and these are unchanged in the long run. the availability and productivity of real resources, not by the output level. b. The shape of the short-run aggregate supply curve is points eBook upsloping, because wages adjust more rapidly than the price level vertical, because wages adjust at the same rate as the price level. upsloping, because wages adjust more slowly than the price level,...
The Queensland economy is initially in long-run equilibrium. But the economy is hit by a price increase in imported fertilizers which are essential for the state's agricultural sector. In the short run, the short-run aggregate supply curve shifts left. In the long run, the price level is lower than its original value, output returns to potential, and real wages increase. In the short run, the short-run aggregate supply curve shifts right. In the long run, the price level returns to...
1. If wages adjust fully to price increases in the long run, fiscal policy will a. have no affect on the price level.b. have no affect on output.c. have no affect on either output or the price level.d. affect both output and the price level.
The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected, production is a.more profitable and employment and output rises. b.more profitable and employment and output falls. c.less profitable and employment and output rises. d.less profitable and employment and output falls.
Suppose the competitive tablet market is in long-run equilibrium. If at this equilibrium, the typical firm produces 10,000 tablets per month, total costs for this production is $2,000,000, and the minimum of the average variable costs is $75, what price will a. Induce entry into the market? When the price rises above $ b. Cause firms to shut down production in the short run? When the price falls below $ c. Result in firms exiting the market in the long...