Answered: 1. The short-run aggregate supply curve…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. Aggregate supply definitions

1. The short-run aggregate supply curve shows:

a. The relationship between the price level and aggregate expenditure

b. What happens to the level of real GDP suppliers are willing and able to produce in an economy as the overall price level changes, during a period in which output prices can change but input prices are fixed

c. How firms respond to changes in interest rates

d. What happens to output in an economy when the government spends more money

2. Which of the following are assumed to remain unchanged along a given short-run aggregate supply curve? Check all that apply.

Real GDP

Input prices

The position of the aggregate demand curve

The technology available to firms

3. The natural rate of unemployment refers to:

a. The unemployment rate that occurs when an economy’s real GDP is equal to its potential output

b. The unemployment that arises due to purely seasonal factors, such as unemployed lifeguards in the winter

c. The unemployment rate that would occur if there were no frictional unemployment

d.The minimum possible unemployment rate of an economy

Complete the following table by matching each definition to the appropriate economic time frame.

Definition	Short Run	Long Run
A period of time in which all input prices and wages are renegotiated
A period of time in which some input prices and wages are fixed

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