Homework Answers
15. Ans - if the price of the gasoline rises, a smaller quantity of it will be bought.
Explanation:
All the other statements are showing that something is being adviced so the only statement is this one which is positive statement.
16. Ans - short run aggregate supply will shift to the right.
Explanation:
When short run aggregate supply will shift to the right this causes the output to increases and price to decrease so the output will come back to potential GDP.
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2.5 pts Question 15 Which of the following is a positive economic statement? The government should...
Suppose the economy is at a short-run equilibrium GDP that lies below potential GDP. Which of...
Suppose the economy is at a short-run equilibrium GDP that lies below potential GDP. Which of the following will occur because of the automatic mechanism adjusting the economy back to potential GDP? A) Output will decrease. B) Prices will increase. C) Unemployment will rise. D) Short-run aggregate supply will shift to the right.
Suppose that workers and firms perfectly forecast inflation, so that the real wage remains unchanged as...
Suppose that workers and firms perfectly forecast inflation, so that the real wage remains unchanged as the price level rises over time. Prices and wages rise at the same rate, which implies that the real wage stays constant. The following graph shows the aggregate demand curve (AD) in an economy in long-run equilibrium. Assume the natural rate of unemployment is 6%, and potential output is $50 trillion. Use the orange points (square symbol) to draw the aggregate supply curve in...
A weakness of the neoclassical economic view is that it: can overlook the long-term causes of...
A weakness of the neoclassical economic view is that it: can overlook the long-term causes of economic growth like the existing natural rate of unemployment even when the economy is at potential GDP. focuses on the long-term factors for economic growth and not the short-term causes of economic growth such as why unemployment fluctuates up and down over a few years. can overlook the efficiency of the market economy in self-correcting in the long-run. Keynes' Law says that demand creates...
Question 70 2.5 pts In the unemployment rate, part-time workers are: not included in the labor...
Question 70 2.5 pts In the unemployment rate, part-time workers are: not included in the labor force. included in the labor force, but counted as unemployed. treated the same way as discouraged workers. included in the labor force and counted as employed. Question 69 2.5 pts Which of the following would be officially classified as unemployed? O a school administrator who has been working as a substitute teacher one day per week while looking for a full-time job in administration...
Question 21 2.5 pts Which of the following statements is false? corporations, unlike proprietorships and partnerships,...
Question 21 2.5 pts Which of the following statements is false? corporations, unlike proprietorships and partnerships, are subject to double taxation. bond prices will fall when lenders expect higher rates inflation in the future. the stock and bond markets are very efficient. In real life, when an individual expects the economy to expand, he should hold no nominal assets. Question 22 2.5 pts Which of the following statements is true? The relationship between risk and potential reward is inverse. Bond...
Refer to the diagram that shows an ADIAS model fora hypothetical economy The economy begins in...
Refer to the diagram that shows an ADIAS model fora hypothetical economy The economy begins in long-run equilibrium at point A AS1 Following the positive AS shock shown in the diagram, the adjustment process will take the economy to a long-run equilibrium where the price level is AS2 and real GDP is O A. 100; 750 B. 70; 500 O C. 50; 850 O D. 50; 950 O E. 70; 750 100 . 70 50 AD 500 750 850 Real...
need some help solving. thank you Question 15 2.5 pts Which of the following is the...
need some help solving. thank you
Question 15 2.5 pts Which of the following is the main difference between the short term and the long term? (select ALL correct answers) capacity resources can be adjusted in the short term but not in the long term direct labor can be adjusted in the short term but not in the long term capacity resources can be adjusted in the long term but not in the short term direct labor can be adjusted...
Consider the neoclassical zone in the graph above. Which of the following is a true statement...
Consider the neoclassical zone in the graph above. Which of the
following is a true statement about Say’s Law in the neoclassical
zone?
Shifts of the AD curve have little to no effect on supply
output because the LRAS at full output is creating demand.
Because equilibrium is close to or at potential GDP,
unemployment is affected by shifts in the AD curve.
Movement of the AD curve to the right or to the left shifts the
LRAS curve.
What...
Which of the following describes what the Reserve Bank of Australia would do to pursue an...
Which of the following describes what the Reserve Bank of Australia would do to pursue an contractionary monetary policy? Use open market operations to buy bonds and securities. Use open market operations to sell bonds and securities Use open market operations to increase the overnight cash rate. Increase interest rates on mortgages and corporate loans. The Reserve Bank of Australia manages the supply of cash on a daily basis to ensure that every bank has sufficient cash to meet the...
QUESTION 1 Which of the following is an example of an automatic fiscal policy stabilizer? a....
QUESTION 1 Which of the following is an example of an automatic fiscal policy stabilizer? a. Tax revenues fall as real GDP decreases. b. Congress decides to cut spending on national defense. c. Congress cuts individual income tax rates. d. Tax revenues rise after Congress raises corporate tax rates. QUESTION 7 When a country's economy is producing at a level that is less than its potential GDP, the standardized employment deficit will show a ________ than the actual deficit. a....
Suppose that workers and firms perfectly forecast inflation, so that the real wage remains unchanged as the price level rises over time. Prices and wages rise at the same rate, which implies that the real wage stays constant. The following graph shows the aggregate demand curve (AD) in an economy in long-run equilibrium. Assume the natural rate of unemployment is 6%, and potential output is $50 trillion. Use the orange points (square symbol) to draw the aggregate supply curve in...
Question 70 2.5 pts In the unemployment rate, part-time workers are: not included in the labor force. included in the labor force, but counted as unemployed. treated the same way as discouraged workers. included in the labor force and counted as employed. Question 69 2.5 pts Which of the following would be officially classified as unemployed? O a school administrator who has been working as a substitute teacher one day per week while looking for a full-time job in administration...
Question 21 2.5 pts Which of the following statements is false? corporations, unlike proprietorships and partnerships, are subject to double taxation. bond prices will fall when lenders expect higher rates inflation in the future. the stock and bond markets are very efficient. In real life, when an individual expects the economy to expand, he should hold no nominal assets. Question 22 2.5 pts Which of the following statements is true? The relationship between risk and potential reward is inverse. Bond...
Refer to the diagram that shows an ADIAS model fora hypothetical economy The economy begins in long-run equilibrium at point A AS1 Following the positive AS shock shown in the diagram, the adjustment process will take the economy to a long-run equilibrium where the price level is AS2 and real GDP is O A. 100; 750 B. 70; 500 O C. 50; 850 O D. 50; 950 O E. 70; 750 100 . 70 50 AD 500 750 850 Real...
need some help solving. thank you
Question 15 2.5 pts Which of the following is the main difference between the short term and the long term? (select ALL correct answers) capacity resources can be adjusted in the short term but not in the long term direct labor can be adjusted in the short term but not in the long term capacity resources can be adjusted in the long term but not in the short term direct labor can be adjusted...
Consider the neoclassical zone in the graph above. Which of the
following is a true statement about Say’s Law in the neoclassical
zone?
Shifts of the AD curve have little to no effect on supply
output because the LRAS at full output is creating demand.
Because equilibrium is close to or at potential GDP,
unemployment is affected by shifts in the AD curve.
Movement of the AD curve to the right or to the left shifts the
LRAS curve.
What...
Which of the following describes what the Reserve Bank of Australia would do to pursue an contractionary monetary policy? Use open market operations to buy bonds and securities. Use open market operations to sell bonds and securities Use open market operations to increase the overnight cash rate. Increase interest rates on mortgages and corporate loans. The Reserve Bank of Australia manages the supply of cash on a daily basis to ensure that every bank has sufficient cash to meet the...
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