Option C.
At point C, the economy is in the long run equilibrium and at point a, the economy is in recession because output is lower than the potential level of output in the economy. Thus, Option c is correct.
Refer to the following foue flqure when o answering the next question Figure 12.4 : Philips Curve РС the Philips curve in Figure 12.4. At point a, the economy ispoint c, the economy is d. booming...
Reler to the following foure when nswerihg the next ovestion Figure 12.4: Philtips Corve FG : at point c, 8. Consider the Phillips curve in Figure 12.4. At point o, the economy is the economy is a. in recession; booming b. in recession; in recession c in recession; in its long-run equllibrium booming: in recession in its long-run equilibrium; in recession d. e. 3. Combining the 1S and monetary policy rule curves gives us d. the MP curve a. Okun's...
Refer to the information provided in Figure 12.4 below to answer the question(s) that follow. a. Industry X Price per unit of X (5) so Units of X b. Industry Y b. Industry Y Price per unit of Y (5) Units of Y Figure 12.4 There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of sand D. Figure 12.4 There are two sectors in the economy, X and Y,...
Consider the following Philips Curve. ? = Eπ − 0.6 (?−0.05) A) Interpret the Philips Curve. ( 5 points) B) Assume that Eπ=0.02. Draw the graph of the Philips Curve and call it Figure 1. What is the slope of the Graph? What are the long-run unemployment rate and the long-run inflation rate? ( 5 points) C) Is there any possibility that a government can decrease the inflation rate without any change in the unemployment rate? If yes, how? Explain...
The figure below depicts the aggregate demand curve (AD), the short-run aggregate supply curve (SRAS), and the long-run aggregate supply curve (LRAS) for the United States. The economy is initially at long-run equilibrium, at point A.One of the most contentious issues among economists involves the economy’s adjustment to long-run equilibrium. Some economists believe that adjustment can and should occur naturally. This group, the classical economists, stress the importance of aggregate supply. Others see the return to long-run equilibrium as an...
QUESTION 31 Figure 13-5 shows the short-run macroeconomic equilibrium of an economy at Point A. In the figure, Point A suggests that: Figure 13-5 LRAS SRAS AD Real GDP a. the government should increase the level of taxes in the cconomy. b. the economy is operating with a recessionary gap c. the govemment should decrcase its budget d. the economy is operating at long-run equilibrium. e. the real value of currency in the economy is lower than its nominal valuc....
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...
The figure below depicts the aggregate demand curve (AD) and the long-run aggregate supply curve (LRAS) for the United States. The economy is initially at long-run equilibrium, at point A.One of the most contentious issues among economists involves the economy’s adjustment to long-run equilibrium. Some economists believe that adjustment can and should occur naturally. This group, the classical economists, stresses the importance of aggregate supply. Others see the return to long-run equilibrium as an adjustment that occurs unpredictably and often...
need help Question 9 (1 point) Use the figure below to answer the following questions. Price level (GDP dellotor, 2007- 100 LAS 110 SAS 100 320 360 400 440 480 520 Real GDP billions of 2007 dollars) Figure 10.3.1 Refer to Figure 10.3.1. As the economy automatically adjusts to long-run equilibrium, the A) SAS curve shifts leftward. O B) AD curve shifts rightward. OC) AD curve shifts leftward. OD SAS curve shifts rightward. O E ) LAS curve shifts leftward....
Consider the exhibit below for the following questions. Figure 33-4 Refer to Figure 33-4. The economy would be moving to long-run equilibrium if it started at a. A and moved to B. b. C and moved to B. C. D and moved to C. d. None of the above is correct.
Refer to Figure 14-1. Suppose the economy is operating at point m on curve A. The decision to move to point p I. requires a sacrifice of current consumption. II. requires a sacrifice of future consumption. III. adds to the economy’s capital stock assuming depreciation remains at a level corresponding to point m. IV. enables the economy to increase both its consumption and investment in the future. Select one: a. I and II only b. I and III only c....