Homework Answers
ANSWER:
The correct answer is option b that is positive AS shock. (as prices have decreased and real gdp has increased which means people will buy more meaning positive shock.)
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Suppose the economy is hit by a shock and we observe that the price level has...
The economy of Neverland has the following AD and AS schedules. Denote Yad as the level...
The economy of Neverland has the following AD and AS schedules. Denote Yad as the level of real GDP along the AD curve; let Yas be the level of real GDP along the AS curve. GDP is shown in billions of 2002 dollars. (10 marks) Price Level 90 100 110 120 130 140 YAD 1100 1000 900 800 700 600 YAS 750 825 900 975 1050 1125 a. Plot the AD and AS curves on a scale diagram. b. What...
1. Inflationary pressure in the AS-AD model can be shown as a a) supply shock that...
1. Inflationary pressure in the AS-AD model can be shown as
a
a) supply shock that shifts the AD to the left.
b) rise in input prices affecting most firms across the economy
shifting AS curve to the right.
c) rise in input prices affecting most firms across the economy
shifting AS curve to the left.
2. Which of the following would cause a positive demand shock
(shift to the right) in aggregate demand?
a) decreased availability of capital stock....
Suppose the current level of real GDP for an economy is below its potential level of...
Suppose the current level of real GDP for an economy is below its potential level of RGDP. Starting with this situation, and in the absence of any government action, what should next happen in the AD-AS model? Group of answer choices A. A decrease in the Long-Run Aggregate Supply B. An increase in Aggregate Demand C. A decrease in Aggregate Demand D. An increase in the Short-Run Aggregate Supply E. An increase in the Long-Run Aggregate Supply F. A decrease...
Por CPI LRAS, SRAS, AD AD, AD Y, Үр Ү, Yor Real GDP Suppose the economy...
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...
draw a graph Suppose that a closed economy with zero inflation is hit by a negative...
draw a graph
Suppose that a closed economy with zero inflation is hit by a negative shock to autonomous consumption. The government is considering (a) using fiscal policy (b) using monetary policy (c) letting the economy self-equilibrate. a. Draw graphs showing the goods market and money market in long run equilibrium before the negative AD shock. Be careful to show how the levels of the variables in each market are related.
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...
During 2007, the U.S. economy was hit by a price shock when the price of oil...
During 2007, the U.S. economy was hit by a price shock when the price of oil increased from around $60 per barrel to around $130 per barrel by June 2008. While inflation increased during the fall of 2007 (from around 2.5% to 4.0%), unemployment did not change significantly (it even increased slightly). Explain the relationship between inflation and unemployment in 2007 using the modern Phillips curve concept.
1. The diagram below shows an AD/AS model for a hypothetical economy. The economy begins in...
1. The diagram below shows an AD/AS model for a hypothetical economy. The economy begins in long-run equilibrium at point A. Price Level - AD, -t-AD₂ 1250 700 800 900 1000 Real GDP C. Describe a plausible economic event (ie. Shock) that could have shifted the AD curve from AD1 to AD2? D. Please describe the adjustment process that would return the economy to its long-run equilibrium following the negative aggregate demand shock shown in the diagram.
27) Suppose we observe a rise in the prics ot sold. Which one of the following...
27) Suppose we observe a rise in the prics ot sold. Which one of the following is a likely explanation und an ncease n thr qantity of good A bought a 2 A) The demand for A increased. B) The supply of A increased C) The demand for A decreased. D) The supply of A decreased. E) The law of demand is violated. Tp 28) 28) Suppose we observe a fall in the price of gu and sold. Which one...
Price level or GDP deflator SRAS SRAS, SRAS, AD AD AD 0 Output or RGÓP Suppose...
Price level or GDP deflator SRAS SRAS, SRAS, AD AD AD 0 Output or RGÓP Suppose the short-run macroeconomic equilibrium is at point A. In the short run, a positive supply shock would move the equilibrium to A point E. B. point B. C. point H D. point
The economy of Neverland has the following AD and AS schedules. Denote Yad as the level of real GDP along the AD curve; let Yas be the level of real GDP along the AS curve. GDP is shown in billions of 2002 dollars. (10 marks) Price Level 90 100 110 120 130 140 YAD 1100 1000 900 800 700 600 YAS 750 825 900 975 1050 1125 a. Plot the AD and AS curves on a scale diagram. b. What...
1. Inflationary pressure in the AS-AD model can be shown as
a
a) supply shock that shifts the AD to the left.
b) rise in input prices affecting most firms across the economy
shifting AS curve to the right.
c) rise in input prices affecting most firms across the economy
shifting AS curve to the left.
2. Which of the following would cause a positive demand shock
(shift to the right) in aggregate demand?
a) decreased availability of capital stock....
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...
draw a graph
Suppose that a closed economy with zero inflation is hit by a negative shock to autonomous consumption. The government is considering (a) using fiscal policy (b) using monetary policy (c) letting the economy self-equilibrate. a. Draw graphs showing the goods market and money market in long run equilibrium before the negative AD shock. Be careful to show how the levels of the variables in each market are related.
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...
1. The diagram below shows an AD/AS model for a hypothetical economy. The economy begins in long-run equilibrium at point A. Price Level - AD, -t-AD₂ 1250 700 800 900 1000 Real GDP C. Describe a plausible economic event (ie. Shock) that could have shifted the AD curve from AD1 to AD2? D. Please describe the adjustment process that would return the economy to its long-run equilibrium following the negative aggregate demand shock shown in the diagram.
27) Suppose we observe a rise in the prics ot sold. Which one of the following is a likely explanation und an ncease n thr qantity of good A bought a 2 A) The demand for A increased. B) The supply of A increased C) The demand for A decreased. D) The supply of A decreased. E) The law of demand is violated. Tp 28) 28) Suppose we observe a fall in the price of gu and sold. Which one...
Price level or GDP deflator SRAS SRAS, SRAS, AD AD AD 0 Output or RGÓP Suppose the short-run macroeconomic equilibrium is at point A. In the short run, a positive supply shock would move the equilibrium to A point E. B. point B. C. point H D. point
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