25- Which of the following statements is true in a situation where labor productivity increases in an economy? a) aggregate supply decreases B) aggregate supply shifts to the right NS) aggregate supply shifts to the left D) aggregate demand shifts to the right TO) aggregate demand shifts to the left
Q: How would the following changes shift aggregate demand? Label whether it is an "increase in…
A: There is a negative or inverse relationship between the price of goods and services and their…
Q: If young business professionals in America suddenly decide that driving German-made cars (=produced…
A: If young business professionals in America suddenly decide that driving German-made cars (=produced…
Q: Suppose the aggregate demand and short-run aggregate supply schedules for an economy whose potential…
A: The short-run equilibrium level of real GDP occurs at the intersection point of SRAS and AD. i.e.,…
Q: An increase in the price of energy would a- shift the short-run aggregate supply down/right b-…
A: The aggregate supply curve shows the total quantity of output that firms will produce and sell at…
Q: Aggregate demand shifts left if a. government purchases decrease and shifts left if stock prices…
A: Aggregate demand is the amount of sales which an entrepreneur actually expects from the sale of the…
Q: Demonstrate the Effects of an Adverse Oil Price Shock Rise using the Aggregate Demand – Aggregate…
A: Aggregate supply, often known as total production, is the whole supply of goods and services…
Q: The quantity of real GDP supplied at different price levels is reflected by the Select one: a. total…
A: Equilibrium occurs at such a price level where real GDP supplied equals real GDP demanded.
Q: If aggregate demand increases while aggregate supply is constant in an economy in the short run,…
A: In the short run we have upward sloping supply curve and downward sloping demand curve. If aggregate…
Q: how each of the following shocks can impact the demand or supply of oil: A. A worldwide economic…
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…
Q: 14- Draw a fully labelled diagram to illustrate the changes in aggregate demand curve in the…
A: Aggregate demand is downward sloping curve which shows inverse relationship between price and real…
Q: Explain why shifts of the aggregate demand curve change the price level in the long run but do not…
A: 10-3 Potential output is also called the natural GDP which says the maximum level of real GDP that…
Q: Question 10: Assume an economy operates in the intermediate range of its aggregate supply curve. For…
A: Free goods don’t require resources to produce them as they are available freely in nature. Therefore…
Q: Base on the aggregate demand-aggregate supply model, an increase in the stock market, which makes…
A: The aggregate demand and aggregate supply model helps to determine the price level and the real…
Q: An increase in aggregate demand when the economy is operating at near full capacity is likely to…
A: In an economy, full capacity level of output is also known as potential Output level that can be…
Q: The effects of a higher than expected price level are shown by Answer shifting the short-run…
A: Short run It is a period during some of the factor prices(specially labor) remains fixed by an…
Q: The upward slope of the short-run aggregate supply curve is based on the assumption that: 1)…
A: When talking about aggregate demand and aggregate supply, the slope of thise curves depends upon…
Q: Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now…
A: When the country of Macroland is in recession: Recession: Recession is an economic phase which…
Q: he vertical axis of the aggregate demand and aggregate supply model measures the overall (OUTPUT,…
A: Demand is the desire, willingness, and ability of consumers to pay a specific price for a product or…
Q: Assignment 4 i. Differentiate between Aggregate Demand ( AD) Curve and Demand Curve (Micro…
A: The AD curve is the curve that shows a different level of output demanded by the economy at a…
Q: In response to the demands of environmentalists, large sections of timberlands are put off limits to…
A: Due to a rise in the demand for environmentalists, there is logging of large sections of timberlands…
Q: Base on the aggregate demand-aggregate supply model, in the long-run, an increase in export sales…
A: Aggregate demand is composed of consumption spending, investment spending, government purchases and…
Q: Which of the following both shift the aggregate demand curve to the right? Group of…
A: Aggregate demand curve is a downward sloping curve indicating the negative relationship between the…
Q: Suppose the aggregate demand and short-run aggregate supply schedules for an economy whose potential…
A: Recessionary Gap occurs when Real GDP is less than the Potential GDP. Due to recessionary gap,…
Q: se the model of aggregate demand and short-run aggregate supply to explain how each of the following…
A: Hey, Thank you for the question. According to our policy we can only answer up to 3 sub parts per…
Q: Which of the following is likely to occur if an increase in legal immigrants significantly reduces…
A: Answer: B. Aggregate supply will increase (shift right) Explanation: If an increase in legal…
Q: uestion 27 The slope of a long-run aggregate supply curve is vertical, because full-employment…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Which of the following will shift the aggregate demand curve to the right? a.A new technology is…
A: Aggregate demand is the sum of consumption, investment, government spending and net exports in an…
Q: Refer to Figure-1, long-run equilibrium would be established by a(n) (objective C3) Question…
A: Aggregate supply refers to the collective supply for goods and services in an economy. It increases…
Q: If aggregate demand shifts right then in the short run Group of answer…
A: Firms increase (decrease) production if price level is higher (lower).
Q: Refer to Exhibit 5.4, which shows the aggregate demand and supply curves for the United States. A…
A: In the event that either the aggregate supply or aggregate demand curve shifts in the aggregate…
Q: Assume that in response to a pandemic, Congress is considers allocating funds to states to build…
A: Congress uses fiscal policy to affect real GDP in the the economy. It refers to changes in…
Q: If aggregate demand is constant in an economy and aggregate supply decreases in the short run, which…
A: The aggregate demand and aggregate supply model is used to determine the equilibrium price level and…
Q: Question 26 The effects of a higher than expected price level are shown by Answer shifting the…
A: Question 26: Supply refers to the relation between the price of the commodity and the willingness of…
Q: Suppose that the aggregate demand and aggregate supply schedules for a hypothetical economy are as…
A:
Q: Suppose a fall in stock prices makes people feel poorer. The decrease in wealth would induce people…
A: Aggregate demand shows the total demand for final goods and services produced in an economy during a…
Q: Select the correct statement/statements which are correct as per the famous ‘Say’s Law’ using the…
A: Correct option is (D) 1,2 and 3
Q: A vertical aggregate supply graph indicates that aggregate demand has no effect on: A) Prices B)…
A: Aggregate supply curve shows relationship between price and quantity of output supplied.
Q: Suppose that the aggregate demand and aggregate supply schedules for a hypothetical economy are as…
A: Aggregate Demand and Aggregate Supply The entire amount of money spent on those goods and services…
Q: If aggregate demand increases in an economy while aggregate demand is constant in the short run,…
A: An increase in consumption and investment leads to an increase in the aggregate demand for goods and…
Q: At a point along the short-run aggregate supply curve that is to the right of the point where it…
A: The short-run aggregate supply is the locus of the combinations of price levels and the quantities…
:25-Which of the following statements is true in a situation where labor productivity increases in an economy? |
|
Step by step
Solved in 2 steps
- (3) "The aggregate demand curve slope slopes downward because when the price level is lower, people can afford to buy more, lead to the rise in aggregate demand. When price rises, people can afford to buy less, resulting to the fall in aggregate demand. It is therefore very much an extension of the Law of Demand in Microeconomics." Is this a good explanation of the shape of the AD curve? Why or why not?“The oil Price run-up of 2007-08 was caused by strong demand confronting stagnating world production. Although the causes were different, the consequences for the economy appear to have been very similar to those observed in earlier episodes, with significant effects on overall consumption spending and purchases of domestic automobiles in particular. The experience of 2007-08 should thus be added to the list of recessions to which oil prices appear to have made a material contribution.” Source: Hamilton, J.D., 2009. Causes and Consequences of the Oil Shock of 2007-08 (No. w15002). National Bureau of Economic Research. a) Oil price shocks have an evident impact on the short run aggregate supply curve. With the help of a graph demonstrate how rising oil prices affect the SRAS and explain what other factors can cause this shift. b) Different theories…Suppose the economy is operating at potential GDP when It experiences an increase in export demand. How might the economy increase production of exports to meet this demand, given that the economy is already at full employment?
- From the information provided, determine whether you are given an Aggregate Supply or Aggregate Demand Schedule and, if Aggregate Supply, the time frame associated with the price level and output HINT: You may want to plot out the points on a graph. 6 Price Level 27:26 120 121 122 123 124 Multiple Choice Immediate Short Run Aggregate Supply Long Run Aggregate Supply Short Run Aggregate Supply Output (in billions) $550 555 558 561 565 Aggregate Demand10-8. Assume that the position of a nation's aggregate demand curve has not changed, but the long-run equilibrium price level has declined. Other things being equal, which of the following factors might account for this event? a. An increase in labor productivity b. A decrease in the capital stock c. A decrease in the quantity of money in circulation d. The discovery of new mineral resources used to produce various goods e. A technological improvementQuestion 2: Do you agree with the following statement? Carefully explain your answer. “During the early stages of the COVID-19 pandemic government-imposed measures have forced many businesses to produce below their potential level of output. This means that the Long Run Aggregate Supply Curve of the Australian economy has shifted to the left leading to an economic recession.”
- 51) Which of the following both shift aggregate-demand curve to the right? an increase in taxes and at a given price level consumers feel more wealthy a decrease in taxes and at a given price level consumers feel less wealthy an increase in taxes and at a given price level consumers feel less wealthy a decrease in taxes and at a given price level consumers feel more wealthy120 116 112 108 104 100 10 20 30 40 50 60 70 80 OUTPUT (Billions of dollars) Suppose the government passes a law that significantly increases the minimum wage. The policy will cause the natural rate of unemployment to . This will result in which of the following? A shift the long-run aggregate supply curve to the right No effect on the long-run aggregate supply curve A shift the long-run aggregate supply curve to the left Left No shift In the following table, determine how each event affects the position of the long-run aggregate supply (L Right Direction Curve Shift The government allows more immigration of working-age adults. For environmental and safety reasons, the government requires that the country's nuclear power plants be permanently shut down. A natural disaster destroys a significant amount of the economy's production facilities. PRICE LEVEL10. The table below shows the aggregate demand and short run aggregate supply schedules of India. The potential aggregate output of India is 1050 billion rupees. Aggregate Price Level Real GDP demanded Real GDP supplied in the (billions of rupees) short run (billions of rupees) 100 1150 1050 110 1100 1100 120 1050 1150 130 1000 1200 140 950 1250 150 900 1300 160 850 1350 a) Represent the above information in an appropriately labelled diagram. b) What are the short run equilibrium price level and aggregate output? c) Calculate the output gap, and state what type of gap the economy is facing.
- In 2013, the economy of Boonton had an aggregate demand and aggregate supply according to the following schedule: Price Level Aggregate Demand Short-Run Aggregate Supply Long-Run Aggregate Supply 80 $1405 $1075 $1365 90 $1370 $1150 $1365 100 $1335 $1225 $1365 110 $1300 $1300 $1365 120 $1265 $1375 $1365 130 $1230 $1450 $1365 140 $1195 $1525 $1365 What was Boonton’s long-run equilibrium output in 2013?The following graph shows an increase in aggregate demand (AD) in a hypothetical country. Specifically, aggregate demand shifts to the right from AD1 to AD2, causing the quantity of output demanded to rise at all price levels. For example, at a price level of 140, output is now $400 billion, where previously it was $300 billion. 170 160 150 140 - 130 AD2 120 110 AD, 100 90 100 200 300 400 500 600 700 800 OUTPUT (Billions of dollars) The following table lists several determinants of aggregate demand. Complete the table by indicating the change in each determinant necessary to increase aggregate demand. Change Needed to Increase AD Wealth Taxes Interest rates The value of the domestic currency relative to the foreign currency PRICE LEVEL34) Unemployment would increase and prices would decrease if aggregate demand shifted left aggregate demand shifted right aggregate supply shifted left aggregate supply shifted right