Homework Answers
Ans is A
new short run equilibrium is at Y2.
there is an expansionary or inflationary gap which will increase the expectation in price hikes and this will decrease and shift the short run aggregate supply curve to the left.
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Indicate the choice that best completes the statement or answers the question. Price level Potential output SRAS Re...
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...
Question 28 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages...
Question 28 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages in expansionary monetary policy. The impact of expansionary monetary policy will be to increase short-run aggregate supply, decrease prices, and increase real GDP increase aggregate demand, increase prices, and increase real GDP increase aggregate demand, increase prices, and decrease real GDP increase short-run aggregate supply, decrease in prices, and decrease in real GDP
LRAS SRAS с Price level AD b Уf Real GDP Goods and services market Refer to...
LRAS SRAS с Price level AD b Уf Real GDP Goods and services market Refer to Figure: Fiscal Policy 2. If an economy operates in the short run at point a, then if the government were to implement contractionary fiscal policy. then we should expect a/an decrease in SRAS, which moves the economy toward pointc. increase in AD, which moves the economy toward point decrease in AD, which moves the economy toward point b. ZIL P Yf Real GDP Goods...
Update the graph below to show an increase in short run aggregate supply and show what...
Update the graph below to show an increase in short run aggregate supply and show what effect this increase in increase short run aggregate supply will have on price levels and real GDP. 1. Price level SRAS AD Real GDF 2. Assume that a recessionary gap currently exists. If long-run supply (aka, potential output) increases and there is no change to aggregate demand or short run aggregate supply what happens to real GDP and to the recessionary gap?
Question 2 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages...
Question 2 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages in expansionary monetary policy. The impact of expansionary monetary policy will be to increase aggregate demand, increase prices, and increase real GDP - increase aggregate demand, increase prices, and decrease real GDP increase short-run aggregate supply, decrease in prices, and decrease in real GDP o increase short-run aggregate supply, decrease prices, and increase real GDP Page 2 of 30 Previous Page Next Page
Refer to the figure below. Suppose the economy is in a short-run equilibrium at output Y3...
Refer to the figure below. Suppose the economy is in a short-run
equilibrium at output Y3 and inflation rate
π2. The economy is currently experiencing ______, and
the correct monetary policy response to this situation, to return
the economy to potential GDP, is to ______.
Select one:
a. a recessionary gap; raise taxes
b. an expansionary gap; cut taxes
c. a recessionary gap; increase the money supply
d. an expansionary gap; decrease the money supply
Inflation rate ASI AS2 AD...
Figure: The Money Supply and Aggregate Demand Panel (a) Panel (b) SRAS Price level Price level...
Figure: The Money Supply and Aggregate Demand Panel (a) Panel (b) SRAS Price level Price level SRAS Y Real GDP (per year) Y Y Real GDP (per year) Refer to Figure: The Money Supply and Aggregate Demand. If the Federal Reserve intended to encourage investment and expand the economy, it would T reasury bills, the money supply, and interest rates. This is shown in panel O buy; increase; lower; (a) buy; decrease; lower; (a) buy; increase; raise: (a) O sell;...
The graphs illustrate an initial equilibrium for the economy. Suppose that oil prices temporarily decrease Use...
The graphs illustrate an initial equilibrium for the economy. Suppose that oil prices temporarily decrease Use the graphs to show the new positions of aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS) in both the short run and the long run, as well as the short-run and long-run equilibriums resulting from this change. Then, indicate what happens to the price level and GDP in the short run and in the long run. Short-run graph Long-run graph...
The graph depicts a dynamic aggregate demand (AD) and aggregate supply (AS) model of the economy....
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...
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...
Question 28 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages in expansionary monetary policy. The impact of expansionary monetary policy will be to increase short-run aggregate supply, decrease prices, and increase real GDP increase aggregate demand, increase prices, and increase real GDP increase aggregate demand, increase prices, and decrease real GDP increase short-run aggregate supply, decrease in prices, and decrease in real GDP
LRAS SRAS с Price level AD b Уf Real GDP Goods and services market Refer to Figure: Fiscal Policy 2. If an economy operates in the short run at point a, then if the government were to implement contractionary fiscal policy. then we should expect a/an decrease in SRAS, which moves the economy toward pointc. increase in AD, which moves the economy toward point decrease in AD, which moves the economy toward point b. ZIL P Yf Real GDP Goods...
Update the graph below to show an increase in short run aggregate supply and show what effect this increase in increase short run aggregate supply will have on price levels and real GDP. 1. Price level SRAS AD Real GDF 2. Assume that a recessionary gap currently exists. If long-run supply (aka, potential output) increases and there is no change to aggregate demand or short run aggregate supply what happens to real GDP and to the recessionary gap?
Question 2 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages in expansionary monetary policy. The impact of expansionary monetary policy will be to increase aggregate demand, increase prices, and increase real GDP - increase aggregate demand, increase prices, and decrease real GDP increase short-run aggregate supply, decrease in prices, and decrease in real GDP o increase short-run aggregate supply, decrease prices, and increase real GDP Page 2 of 30 Previous Page Next Page
Refer to the figure below. Suppose the economy is in a short-run
equilibrium at output Y3 and inflation rate
π2. The economy is currently experiencing ______, and
the correct monetary policy response to this situation, to return
the economy to potential GDP, is to ______.
Select one:
a. a recessionary gap; raise taxes
b. an expansionary gap; cut taxes
c. a recessionary gap; increase the money supply
d. an expansionary gap; decrease the money supply
Inflation rate ASI AS2 AD...
Figure: The Money Supply and Aggregate Demand Panel (a) Panel (b) SRAS Price level Price level SRAS Y Real GDP (per year) Y Y Real GDP (per year) Refer to Figure: The Money Supply and Aggregate Demand. If the Federal Reserve intended to encourage investment and expand the economy, it would T reasury bills, the money supply, and interest rates. This is shown in panel O buy; increase; lower; (a) buy; decrease; lower; (a) buy; increase; raise: (a) O sell;...
The graphs illustrate an initial equilibrium for the economy. Suppose that oil prices temporarily decrease Use the graphs to show the new positions of aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS) in both the short run and the long run, as well as the short-run and long-run equilibriums resulting from this change. Then, indicate what happens to the price level and GDP in the short run and in the long run. Short-run graph Long-run graph...
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...
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