How is long-term growth illustrated in an AD/AS model?
Question 1
How is long-term growth illustrated in an AD/AS model?
A. Long term growth is shown by the decrease of potential GDP, represented by a vertical line.
B. Long term growth is shown by the decrease of Real GDP represented by a horizontal line.
C. Long term growth is shown by the increase of potential GDP, represented by a horizontal line.
D. Long term growth is shown by the increase of potential GDP, represented by a vertical line.
Question 2
If the economy is operating in the Keynesian zone of the SRAS curve and aggregate demand falls, what is likely to happen to real GDP?
A. Cannot be determined from information given
B. Real GDP increases
C. Real GDP remains unchanged
D. Real GDP decreases
Homework Answers
QUESTION 1
Answer for above asked question is option '' D '' that is long term growth is shown by increase of potential GDP , represented by a vertical line .
LONG TERM GROWTH MEANING
LONG TERM GROWTH refers to an strategy for investment which aims to increase the magnitude of a list over a long span of time .
AD MODEL = AGGREGATE DEMAND
AS MODEL = AGGREGATE SUPPLY
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QUESTION 2
Answer of above asked question is option '' B '' that is real GDP increase .
REAL GDP = GDP - INFLATION
SRAS = SHORT RUN AGGREGATE SUPPLY
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Question 56 (1 point) Consider the aggregate supply-aggregate demand model. How does an increase in aggregate...
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Figure: AD–AS Refer to Figure: AD–AS. Assume that the economy is in long-run equilibrium. If the...
Figure:
AD–AS
Refer to Figure: AD–AS. Assume that the economy
is in long-run equilibrium. If the Federal Reserve were to lower
the targeted federal funds rate we would most likely expect:
there will be a downward movement along the aggregate demand
curve AD1.
the aggregate demand curve will stay unchanged at
AD1.
the aggregate demand curve will shift to
AD3.
the aggregate demand curve will shift to
AD2.
LRAS Aggregate price level SRAS AD, AD AD, Y₂ YpY, Real GDP
Figure 4 nflation Rate Dynamic AS Dynamic AD Real GDP Growth In figure 4, in the long run we would expect aggregate supply to be: Figure 4 Final Eco 216.pdf 8 KB A. horizontal B. vertical C. positively sloped D. negatively sloped E. negatively sloped Reset Selection In figure 4, if dynamic AD decreases, then in the short run real GDP growth: Figure 4 Final Eco 216.pdf 8 KB A. and inflation increase B. and inflation decrease C. rises and...
Question 56 (1 point) Consider the aggregate supply-aggregate demand model. How does an increase in aggregate demand affect the unemployment rate and the inflation rate? LRAS: SRAS Price level (GDP deflator 2009 = 100) AD AD AD GDP, GDP, GDP AD AD AD2 GDP, GDP, GDP; Real GDP (trillions of 2009 dollars) The unemployment rate decreases and the inflation rate increases. ia The unemployment rate increases and the inflation rate decreases. Both the unemployment rate and the inflation rate increase....
The graph depicts a dynamic aggregate demand (AD) and aggregate supply (AS) model of the economy. Suppose that in 2003, the economy is in macroeconomic equilibrium, with GDP at GDP (year 1). The Fed projects that in 2004, the aggregate demand curve will be AD (year 2), that potential real GDP will be $12.45 trillion (GDP (year 2), and that actual real GDP will be $12.39 trillion LRAS (year 1) LRAS (year 2) SRAS (ycar1) SRAS (year 2 ear Year...
The Keynesian zone of the aggregate supply curve is_._while the neoclassical portion is_.... O upward-sloping, downward-sloping horizontal; vertical O vertical; flat How does the intermediate zone of the AD-AS curve follow Say's law when AD shifts to the right? O SRAS creates more demand by decreasing prices and output level. SRAS moves closer to potential GDP and increases price level. O SRAS is flatter and creates more supply by decreasing prices and output level Which of the following statements about...
Figure:
AD–AS
Refer to Figure: AD–AS. Assume that the economy
is in long-run equilibrium. If the Federal Reserve were to lower
the targeted federal funds rate we would most likely expect:
there will be a downward movement along the aggregate demand
curve AD1.
the aggregate demand curve will stay unchanged at
AD1.
the aggregate demand curve will shift to
AD3.
the aggregate demand curve will shift to
AD2.
LRAS Aggregate price level SRAS AD, AD AD, Y₂ YpY, Real GDP
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