1. The basic aggregate demand and aggregate supply curve model help explain A) fluctuations in real GDP and the price level. B) long-term growth. C) price fluctuations in an individual market. D) output fluctuations in an individual market. 2. The demanded. shows the relationship between the price level and quantity of real GDP A) consumer price index B) aggregate expenditure line C) 45-degree line D) aggregate demand curve

1. The basic aggregate demand and aggregate supply curve model help explain A) fluctuations in real GDP and the price level. B) long-term growth. C) price fluctuations in an individual market. D) output fluctuations in an individual market. 2. The demanded. shows the relationship between the price level and quantity of real GDP A) consumer price index B) aggregate expenditure line C) 45-degree line D) aggregate demand curve

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 1QR

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please draw graph specify endpoints thanks 1 The table below shows the aggregate demand for the economy of Itera. Its potential GDP (LAS) is $725. Price Index Aggregate Quantity Demanded 70 725 90 675 110 625 130 575 a. Draw the aggregate demand curve and the potential GDP (LAS) curve in the graphing area below. Plot only curve in the graphing area using the appropriate tool. Once all points have been plotted, click on the line (not tool icon will pop up. You can use this to enter exact co-ordinates for your points as needed. for the economy of Itera AS Tools 120 AD (900, 120) Potential GDP 110 100 AD2 90 80 70 400 500 600 700 800 900 Real GDP b. The equilibrium level of GDP is $ and the price index is c. There is a recessionary v gap in Itera of $ d. If aggregate demand in Itera were to increase by $150, draw the new (AD2) curve in the graphing area above. Remember to only the endpoints of the curve. e. The new equilibrium level of GDP is $ and the price index is f. Now there is…
1. The following are variables that may cause shifting of aggregate demand (AD) curve. Discuss the effect of increasing these variables to the aggregate demand. Use graphical approach to demonstrate the effect of increasing of each variable and explain why the AD curve shifted. a. Interest rate (domestic) b. Government expenditure (domestic)
Adjust the graph to show the effect of a decrease in the aggregate price level. look at image Which of the statements offers the best explanation for the change demonstrated in the graph? a. Prices of goods and services decrease on average. b. Consumers purchase less of one product, like cars, and more of another, like clothing. c. The law of demand dictates the behavior of the aggregate demand curve. d. The prices of a few goods in the market dropped substantially.
Match each definition to the appropriate component of aggregate demand. Definition The sum of the expenditures of business firms on new plant, equipment, and software and of households on new homes The goods and services purchased by all levels of government The total amount spent by consumers on newly produced goods and services The difference between exports and imports ⒸNet exports O Government spending Consumer Expenditure Which of the following components represents the largest piece of aggregate demand? O Consumer expenditure O Investment spending O Which of the following components represents the smallest piece of aggregate demand? O Consumer expenditure O Government spending O Investment spending ONet exports Investment Spending Government Spending Net Exports O O O O
The effect of an increase in the price level on the aggregate-demand curve is represented by a a. movement to the left along a given aggregate-demand curve. b. shift to the right of the aggregate-demand curve. c. shift to the left of the aggregate-demand curve. d. movement to the right along a given aggregate-demand curve.
Assume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on: aggregate demand, aggregate supply, price level, real GDP.(a) A decrease in government expenditure in infrastructure(b) A severe recession occurs in a country which has been a major importer of thenation’s exports.(c) The federal government increases business taxes with diagram
Question 19 E) Listen If the nation's capital stock increases which of following will be affected? O Long Run Aggregate Supply O Investment Demand O A8gregate Demand Short Run Aggregate Supply Question 20 LIsten Regarding the question above, describe the short run result of the change? OPrice level increases and real gross domestic product decreases. Price level increases and real gross domestic product increases. Price level decreases and real gross domestic product increases. Price level decreases and real gross domestic product decreases.
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1. What are the components of aggregate supply? Provide 2 substantive postings to each of the 3 Discussion Question's each week. 2. How do aggregate supply shifts occur? Provide 2 substantive postings to each of the 3 Discussion Question's each week. 3. How do recessionary and inflationary GDP gaps arise? Provide 2 substantive postings to each of the 3 Discussion Question's each week.
An increase in consumer confidence in a country will result in a 1.shift of the aggregate demand curve to the right. 2.shift of the aggregate demand curve to the left. 3.movement up the aggregate demand curve to a lower aggregate output. 4.movement down the aggregate demand curve to a higher aggregate output.
The total value of real GDP that all sectors of the economy (C + I + G + Xn) are willing to purchase at various price levels A. Aggregate Supply B. Aggregate Demand C. Equilibrium GDP D. Aggregate Purchases
Real aggregate expenditure, AE (trillions of 2000 dollars) 0 45° Figure 2-2 N A) government expenditures increase. C) the firm's cash flow rises as profits rise. Y = AE AE₂ AE₁ Real GDP, Y (trillions of 2000 dollars) 17) Refer to Figure 2-2. If the U.S. economy is currently at point N, which of the following could cause it to move to point K? B) corporate taxes increase. D) household wealth rises.