170Price140level120100DAD5AD4AD 3AD, AD23.0 4.0 5.0 6.0 7.0 8.0Real GDPIn Exhibit 20-8, if aggregate demand shifts from AD₁ to AD3,O a. real GDP will increase from $3.0 to $4.0, and the price level will increase from 100 to 140.Ob. real GDP will increase from $3.0 to $7.0, and the price level will increase from 100 to 120.Oc. real GDP will increase from $3.0 to $7.0, and the price level will increase from 100 to 140.Od. real GDP will increase from $3.0 to $4.0, and the price level does not change.

According to the given graph, At AD1, real GDP = $3 and Price level = 100 At AD2, real GDP = $4 and…

Answered: 170 Price 140 level 120 100 D AD5 AD4…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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87
An increase in government regulation would cause aggregate: supply to shift to the left. demand to shift to the right. demand to shift to the left. O supply to shift to the right.
$ Which of the following would cause the Aggregate Supply curve to move from AS to AS2 in the graph below? fs Price Level 150 140 130 120 110 100 90 80 70 60 % 5 0 16 5 O A general increase in energy and labor cost for businesses. O A federal government increase in spending. t 6 10 15 Real GDP ($ billion) -AS-AD-AS2 2 fa lyi & 7 7 J * 20 8 8 num lk ( 25 (1¹) 9
How would I do c and d?
With the passage of time, which of the following will help direct this economy in Figure 10-21 toward its potential long-run rate of output (e1 to E2)? Figure 10-21 Price Level ti LRAS E₂ SRAS, SRAS: AD₂ AD₁ Y, Y₁ Goods and Services (Real GDP) Output is initially less than long-run capacity O lower interest rates that will stimulate AD and lower resource prices that will increase SRAS O higher interest rates that will reduce aggregate demand and higher resource prices that will reduce SRAS lower interest rates and higher resource prices, both of which will stimulate aggregate demand O higher interest rates that will reduce SRAS and lower resource prices that will stimulate aggregate demand
33. Refer to Figure 4. As the_____decreases, the amount of ____demanded by all sectors of the economy_____
Price level (CPI) Exhibit 10A-6 Aggregate demand and supply model 250 200 150 100 50 0 2 E₂ 4 LRAS 6 SRAS₁ Given the shift of the aggregate demand curve from AD1 to AD2 in Exhibit 10A-6, the real GDP and price level (CPI) in long-run equilibrium will be: O a. $10 billion and 200. O b. $10 billion and 150. O c. $10 billion and 100. O d. $4 billion and 150. SRAS₂ AD₁ 8 10 12 14 15 16 17 Real GDP (billions of dollars per year) AD₂
Price level LRAS AS1 Figure 12.8 C B A ASO AS₂ AD₁ ADO E Y2 Yo Y₁ Aggregate output ($ billion) AD₂ Refer to Figure 12.8. This economy cannot continue to produce Y₁ (or at point B) because O the price of raw material will increase, shifting the aggregate demand curve to AD2. O all of the above O the price of raw material and wages will increase shifting the aggregate supply curve to AS₁. O the price of inputs will decrease, shifting the aggregate supply curve to AS2.
tion 6 According to aggregate supply and aggregate demand analysis, what happens to P (price level) and Q (GDP) if X increases? Oa. Prices decrease and GDP decreases. O b. Prices increase and GDP decreases. Oc Prices stay the same and so does GDP i AS and AD curves shift by the same amount O d. Prices increase and GDP increases. estion will save this response.
Which of the following would cause the Aggregate Supply curve to move from AS to AS2 in the graph below? A) A general increase in energy and labor cost for businesses. B) A general decrease in labor cost for businesses. C) An increase in productivity. D) A federal government increase in spending.
Price Level LAS SAS, SAS, AD SAS, AD, AD, Real Output Refer to the graph. Suppose the economy is at SAS, and AD₂. What is a possible way the economy can return to potential output? What dynamic price level feedback effect could prevent the return to potential output? How would the dynamic price level feedback effect show up in the graph? O A decrease in asset prices in the economy; a decrease in asset prices would further decrease AD; a shift in AD from AD2 to AD3 O A decrease in material costs in the economy; a decrease in material costs would decrease AD; a shift in AD from AD2 to AD1 A decrease in wages in the economy; a decrease in wages would further decrease AD; a shift in AD from AD2 to AD3 A decrease in wages in the economy; a decrease in wages would further decrease AD; a shift in AD from AD2 to AD1
7. Determinants of aggregate supply The following graph shows an increase in short-run aggregate supply (AS) in a hypothetical economy where the currency is the dollar Specifically, the short-run aggregate supply curve shifts to the right from AS, to AS2, causing the quantity of output supplied at a price level of 100 to rise from $200 billion to $250 billion. 200 PRICE LEVEL 175 150 100 76 50 26 O 0 M 400 II 150 200 250 QUANTITY OF OUTPUT AS, Regulations on the firm Human capital Input prices AS 100 350 The following table lists several determinants of short-run aggregate supply. (?) Complete the table by selecting the changes in each scenario necessary to increase short-run aggregate supply. Change Necessary to Increase AS

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