Homework Answers
1) What is the LRAS curve supposed to tell you?
Answer: The LRAS curve depicts the relationship in the long run between the price level and the quantity of real GDP supplied. The long-run aggregate supply curve reflects that in the long duration, rise in the price level do not affect the level of real GDP
2) Why is the LRAS curve shaped the way it is?
Answer: The LRAS curve is a vertical line at potential GDP. This is because in the long run wages and other input price increases and fall to match changes in the price level.
3) What causes the LRAS curve to shift?
Answer: The LRAS curve shifts because potential GDP increases over time. The increases in potential GDP can be due to:
1. An increase in resources.
2. New innovated technology
3. An increase in machinery and equipment.
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Answer the following questions: (Question 1) (a) What is the LRAS curve supposed to tell you?...
question/104241782 Refer to the following figure to answer the next two questions. Price level LRAS, LRAS,...
question/104241782 Refer to the following figure to answer the next two questions. Price level LRAS, LRAS, (P) Time Runn Attempt due 1 Hour, 12 SRAS, SRAS, AD Real GDP Based on the figure, which of the following would cause the short-run aggregate supply curve to shift from SRASto SRAS2? A temporary rise in the price of oil results in higher gasoline prices. Congress votes to increase the minimum wage. Wages and input prices fall as the economy recovers from a...
a) Provide a factor that would shift the long-run aggregate supply (LRAS) curve to the right....
a) Provide a factor that would shift the long-run aggregate supply (LRAS) curve to the right. What does this shift in LRAS imply for aggregate output? Use the Aggregate Demand and Supply model to illustrate this event. Make sure you properly label all the axes and curves. (You only need to draw a shift in LRAS curve, no need to draw other curves). b) Provide a factor that would shift the short-run aggregate supply (SRAS) curve upward (and to the...
Question 27 2 pts Which of the following causes the SRAS curve to shift right? An...
Question 27 2 pts Which of the following causes the SRAS curve to shift right? An increase in the price of a major input like steel An increase in government spending An increase in the country's physical capital An increase in exports Question 28 2 pts According to what was stated in class, which of the following would shift the LRAS curve right? An increase in the population's education level A decrease in labor hours An increase in the actual...
Q1140 points] Briefly, but not unsatisfactorily, answer the following questions. a) Using the Key...
Q1140 points] Briefly, but not unsatisfactorily, answer the following questions. a) Using the Keynesian cross model where the goods market equilibrium is determined and analyzed, graphically derive the IS curve, and explain each step. Explain what the equilibrium in the goods market implies for the IS curve, i.e., why is the IS curve downward sloping. Also, explain what causes shifts in the IS curve. b) First, based on the analysis of the financial market equilibrium, graphically derive the LM curve....
Answer the following questions about the AD curve used in Macro 1. 1. What two (endogenous)...
Answer the following questions about the AD curve used in Macro 1. 1. What two (endogenous) variables are related by the AD curve? Answer: 2. Explain how the behaviour of the central bank determines the slope of the AD curve. Answer: 3. Below is the equation for the AD curve. 1-c(1-t)-m] Draw a diagram to show the effect on the AD curve of a decrease in exports 3.1. Answer: Draw a diagram to show the effect on the AD curve...
NEED detailed explanations for short-run and long-run equilibrium. For each of the following scenarios, describe the...
NEED detailed explanations for short-run and long-run equilibrium. For each of the following scenarios, describe the effect on the AD curve, the SRAS curve, and the LRAS curve. Identify whether the effect causes a shift of the curve or a movement along the curve and identify the direction of the shift or the movement. Answer these questions on your assignment paper. a. An increase in the money supply causes interest rates to fall. b. The price of commodities (production inputs)...
QUESTION 7 The long run aggregate supply curve (LRAS) is vertical. What economic theory does this...
QUESTION 7 The long run aggregate supply curve (LRAS) is vertical. What economic theory does this represent? o the liquidity theory O a liquidity trap O the classical dichotomy O constant returns to scale QUESTION 8 Why might prices be inflexible in the short run? O sticky wages O sticky prices O missperceptions o all of the above
answer the following ,by including the answer to these questions in your response. What would be...
answer the following ,by including the answer to these questions in your response. What would be a good way to increase the number of organ donors in Georgia? 1. What is the operational definition (the definition you'll use for research purposes) of the main variables involved? For some of these, you'll need to rephrase the question and decide which variables you'll focus on. 2. Which variable is the independent variable? Which one is the dependent variable? How do you tell...
The assignment is about drawing the graph of AD, SRAS and LRAS and writing down what...
The assignment is about drawing the graph of AD, SRAS and LRAS and writing down what would happen under the condition "decrease in personal income taxes" Need to write down everything that happens by following the seven steps: 1) What would happen under the condition? (Whether AD, SRAS, or LRAS would change? And in which direction the curve would shift?) 2) Where is the new short-run equilibrium? (You need to mark the point in the graph.) 3) What changed in...
ugh there is no time limit except for the due date itself, you may only take this homework Question 1 2 pts...
ugh there is no time limit except for the due date itself, you may only take this homework Question 1 2 pts According to the class, why does the AD curve have a negative slope? When P rises, people substitute away from more expensive goods and services so AD decreases When P rises, the purchasing power of income falls so AD decreases When Prises, G decreases which means AD decreases When Prises, the suply of money shifts left sor falls...
question/104241782 Refer to the following figure to answer the next two questions. Price level LRAS, LRAS, (P) Time Runn Attempt due 1 Hour, 12 SRAS, SRAS, AD Real GDP Based on the figure, which of the following would cause the short-run aggregate supply curve to shift from SRASto SRAS2? A temporary rise in the price of oil results in higher gasoline prices. Congress votes to increase the minimum wage. Wages and input prices fall as the economy recovers from a...
Question 27 2 pts Which of the following causes the SRAS curve to shift right? An increase in the price of a major input like steel An increase in government spending An increase in the country's physical capital An increase in exports Question 28 2 pts According to what was stated in class, which of the following would shift the LRAS curve right? An increase in the population's education level A decrease in labor hours An increase in the actual...
Q1140 points] Briefly, but not unsatisfactorily, answer the following questions. a) Using the Keynesian cross model where the goods market equilibrium is determined and analyzed, graphically derive the IS curve, and explain each step. Explain what the equilibrium in the goods market implies for the IS curve, i.e., why is the IS curve downward sloping. Also, explain what causes shifts in the IS curve. b) First, based on the analysis of the financial market equilibrium, graphically derive the LM curve....
Answer the following questions about the AD curve used in Macro 1. 1. What two (endogenous) variables are related by the AD curve? Answer: 2. Explain how the behaviour of the central bank determines the slope of the AD curve. Answer: 3. Below is the equation for the AD curve. 1-c(1-t)-m] Draw a diagram to show the effect on the AD curve of a decrease in exports 3.1. Answer: Draw a diagram to show the effect on the AD curve...
QUESTION 7 The long run aggregate supply curve (LRAS) is vertical. What economic theory does this represent? o the liquidity theory O a liquidity trap O the classical dichotomy O constant returns to scale QUESTION 8 Why might prices be inflexible in the short run? O sticky wages O sticky prices O missperceptions o all of the above
ugh there is no time limit except for the due date itself, you may only take this homework Question 1 2 pts According to the class, why does the AD curve have a negative slope? When P rises, people substitute away from more expensive goods and services so AD decreases When P rises, the purchasing power of income falls so AD decreases When Prises, G decreases which means AD decreases When Prises, the suply of money shifts left sor falls...
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