For each of the following events, what is its effect on prices and output in the short run? &nb...
For each of the following events, what is its effect on prices and output in the short run?
a. Prices of houses fall
b. Businesses become more optimistic
c. The government undertakes expansionary fiscal policy
d. Energy prices rise
e. The labour force increases
f. Taxes are increased
Homework Answers
a) Price of houses fall : Demand for houses rise , this causes more consumer spending . So price level and output rises .
b) Business becomes more optimistic : They start to invest more . So investment spending rises , causes both price and output level to rise .
c) Expansionary fiscal policy : Aggregate demand rises in the economy , both price and output rises .
d) Energy prices rise : Production falls , aggregate supply declines , price rises and output falls .
Add Answer to:
For each of the following events, what is its effect on prices and output in the short run? &nb...
For each of the following events, what is its effect on prices and output in the...
For each of the following events, what is its effect on prices and output in the short run? - the labour force increases - Taxes are increased
15. The short-run aggregate supply curve will shift to the: right if commodity prices i...
15.
The short-run aggregate supply curve will shift to the:
right if commodity prices increase.
left if productivity increases.
left if nominal wages increase.
right if government spending increases.
35.
An expansionary fiscal policy either _____ government spending
or _____ taxes.
decreases; increases
decreases; decreases
increases; decreases
increases; increases
12.
The short run in macroeconomic analysis is a period:
in which many production costs can be taken as fixed.
in which interest rates are fixed.
of two months, and the...
What reference? Name: For each of the following events, use an AD-AS diagram to show the...
What reference?
Name: For each of the following events, use an AD-AS diagram to show the short-run and long-run effects on output and the price level (inflation rate); identify any output gap. Assume the economy starts in long run equilibrium. (1) The government reduces income taxes AS P AD (2) A decrease in consumer confidence leads to lower consumption spending AS P. AD AD-AS practice assignment.pdf 2/2 (3) The Fed decreases the money supply AS Pe K AD y* (4)...
. For each of the following events, what is the effect on the SRAS and LRAS...
. For each of the following events, what is the effect on the SRAS and LRAS curves? a. The labour force grows b. The amount of capital in the economy increases c. Labour productivity rises d. Energy prices rise
(22) In the short run, contractionary monetary policy causes output to _______________ and prices to _______________....
(22)
In the short run, contractionary monetary policy causes output
to _______________ and prices to _______________.
rise; rise
rise; fall
fall; rise
fall; fall
(23)
As the graph illustrates, consumers are worried about the
future and have begun saving more money. If the Fed does
not intervene in this situation, what will happen
to the price level in the long run?
Prices will increase.
Prices will stay the
same.
Prices will decrease.
There is insufficient
information to...
1. For each of the following events, explain the short-run and long-run effects on output and...
1. For each of the following events, explain the short-run and long-run effects on output and price level, assuming policymakers take no action. a. The stock market declines sharply, reducing consumers’ wealth. b. The federal government increases spending on national defense. c. A technological improvement raises productivity. d. A recession overseas causes foreigners to buy fewer U.S. goods. e. Household decide to save a larger share of their income. f. Increased job opportunities overseas cause many people to leave the...
1. If the economy is at full employment, increases in government spending: A) have a multiplier...
1. If the economy is at full employment, increases in government spending: A) have a multiplier effect on equilibrium output. B) have no effect on the aggregate price level. C) are primarily absorbed by price increases. D) reduce aggregate output. 2. Which of the following measures is NOT an example of discretionary fiscal policy? A) The unemployment compensation program pays out more money as unemployment rates rise. B) Tax rates are increased in the hope of slowing down the rate...
A country with a floating exchange rate faces a short-run recession and current account deficit. Policymakers...
A country with a floating exchange rate faces a short-run recession and current account deficit. Policymakers want to use temporary expansionary monetary policy to increase both output and the current account balance. Will they be successful? Only with increasing output Only with increasing the current account balance No, not with either goal Yes, with both goals In the short run, if taxes rise, output will_and the exchange rate will increase; appreciate increase; depreciate decrease; appreciate decrease; depreciate With a fixed...
In the short-run an increase in the costs of production makes A. output and prices rise....
In the short-run an increase in the costs of production makes A. output and prices rise. B. output rise and prices fall. C. output fall and prices rise. D. output and prices fall.
The government has the ability to influence the level of output in the short run using...
The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement as to whether the government should attempt to stabilize the economy. Which of the following are arguments against active stabilization policy by the government? Check all that apply. Select one or more: a. The Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates b. Businesses make investment plans many...
15.
The short-run aggregate supply curve will shift to the:
right if commodity prices increase.
left if productivity increases.
left if nominal wages increase.
right if government spending increases.
35.
An expansionary fiscal policy either _____ government spending
or _____ taxes.
decreases; increases
decreases; decreases
increases; decreases
increases; increases
12.
The short run in macroeconomic analysis is a period:
in which many production costs can be taken as fixed.
in which interest rates are fixed.
of two months, and the...
What reference?
Name: For each of the following events, use an AD-AS diagram to show the short-run and long-run effects on output and the price level (inflation rate); identify any output gap. Assume the economy starts in long run equilibrium. (1) The government reduces income taxes AS P AD (2) A decrease in consumer confidence leads to lower consumption spending AS P. AD AD-AS practice assignment.pdf 2/2 (3) The Fed decreases the money supply AS Pe K AD y* (4)...
(22)
In the short run, contractionary monetary policy causes output
to _______________ and prices to _______________.
rise; rise
rise; fall
fall; rise
fall; fall
(23)
As the graph illustrates, consumers are worried about the
future and have begun saving more money. If the Fed does
not intervene in this situation, what will happen
to the price level in the long run?
Prices will increase.
Prices will stay the
same.
Prices will decrease.
There is insufficient
information to...
1. If the economy is at full employment, increases in government spending: A) have a multiplier effect on equilibrium output. B) have no effect on the aggregate price level. C) are primarily absorbed by price increases. D) reduce aggregate output. 2. Which of the following measures is NOT an example of discretionary fiscal policy? A) The unemployment compensation program pays out more money as unemployment rates rise. B) Tax rates are increased in the hope of slowing down the rate...
A country with a floating exchange rate faces a short-run recession and current account deficit. Policymakers want to use temporary expansionary monetary policy to increase both output and the current account balance. Will they be successful? Only with increasing output Only with increasing the current account balance No, not with either goal Yes, with both goals In the short run, if taxes rise, output will_and the exchange rate will increase; appreciate increase; depreciate decrease; appreciate decrease; depreciate With a fixed...
The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement as to whether the government should attempt to stabilize the economy. Which of the following are arguments against active stabilization policy by the government? Check all that apply. Select one or more: a. The Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates b. Businesses make investment plans many...
Most questions answered within 3 hours.
-
Sales total $300,000 when variable costs total $180,000 and
fixed costs are $60,000. Breakeven sales total:...
asked 1 minute ago -
1)
To calculate the depth of a water well, an explorer drops a stone and with...
asked 1 minute from now -
0.429-g sample of gas occupies 125 mL at 60. cm of Hg and 25°C.
The molar...
asked 47 seconds ago -
The
pH of a 0.90M solution of boric acid (H3BO3) is measured to be
4.64.
Calculate...
asked 20 minutes ago -
on april 10, a company acquired land valued at $58,000 in
exchange for 1,000 shares of...
asked 25 minutes ago -
Is
ampicillin or solvents (such as acetone) more effective at killing
off bacteria, in general? Explain...
asked 30 minutes ago -
The current risk-free rate is 4.0% and the market risk premium
is 5.0%. If Ford Motor...
asked 47 minutes ago -
Advances in technology have increased our opportunities to
connect with others. Along with the benefits of...
asked 55 minutes ago -
Compute the interest rate at which $500 per month payments
should grow to accumulate savings of...
asked 55 minutes ago -
The following information pertains to a weekly payroll of Texera
Tile Company:
a. The total wages...
asked 58 minutes ago -
Alice has the RSA public key (n, e) = (11413, 251) and private
key d =...
asked 1 hour ago -
QUESTION 5
A drug or medicine can reach the brain more effectively by
placing the drug...
asked 1 hour ago