2. The slope and position of the long-run aggregate supply curveWhich of the following factors will influence the position of the long-run aggregate supply curve? Check all that apply.O The amount of available natural resourcesO The price levelO The inflation rateO The quantity of physical capitalSuppose the economy produces real GDP of $70 billion when unemployment is at its natural rate. On the following graph, use the purple line (diamondsymbol) to plot the economy's long-run aggregate supply (LRAS) curve.132128LRAS1241201161121081041005060REAL GDP (Billions of dollars)102030407080PRICE LEVEL Suppose the government passes a law that reduces unemployment benefits in a way that causes unemployed workers to seek out new jobs morequickly. The policy will cause the natural rate of unemployment towhich will:O Shift the long-run aggregate supply curve to the rightO Not affect the long-run aggregate supply curveO Shift the long-run aggregate supply curve to the leftIn the following table, determine how each event affects the position of the long-run aggregate supply (LRAS) curve.Direction of LRAS Curve ShiftEventLeftRightNo ShiftThe government allows more immigration of working-age adults.A scientific breakthrough significantly increases food production per hectare of farmland.A government-sponsored training program increases the skill level of the workforce.

Factors that will increase economy's potential to produce, will shift the long run aggregate supply…

2. The slope and position of the long-run aggregate supply curve Which of the following factors will influence the position of the long-run aggregate supply curve? Check all that apply. The amount of available natural resources The price level The inflation rate The quantity of physical capital Suppose the economy produces real GDP of $70 billion when unemployment is at its natural rate. On the following graph, use the purple line (diamond symbol) to plot the economy's long-run aggregate supply (LRAS) curve. 132 128 LRAS 124 120 118 112 108 104 100 10 20 30 40 50 60 70 80 REAL GDP (Billions of dollars) PRICE LEVEL

2. The slope and position of the long-run aggregate supply curve Which of the following factors will influence the position of the long-run aggregate supply curve? Check all that apply. The amount of available natural resources The price level The inflation rate The quantity of physical capital Suppose the economy produces real GDP of $70 billion when unemployment is at its natural rate. On the following graph, use the purple line (diamond symbol) to plot the economy's long-run aggregate supply (LRAS) curve. 132 128 LRAS 124 120 118 112 108 104 100 10 20 30 40 50 60 70 80 REAL GDP (Billions of dollars) PRICE LEVEL

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 4CQQ

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Table 24.4 describes Santhers economy. Plot the AD/AS curves and identify the equilibrium. Would you expect unemployment in this economy to be relatively high or low? Would you expect prices to be a relatively large or small concern for this economy? Imagine that input prices fall and so AS shifts to the right by 150 units. Identify the new equilibrium. How will the shift in AS affect the original output, price level, and employment?
Suppose the Federal Reserve begins to Increase the supply of money at an Increasing rate. What Impact would that have on GDP, unemployment, and inflation?
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The economy has shifted and the quantity of the real GDP supplied has increased. What has potentially happened to aggregate price levels? Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper. O Potentially the price levels have decreased to a lower aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper. Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have fired some employees as labor has become too expensive.
How does an increase in the price level affect the quantity of real GDP supplied in the long run? OA In the long run, an increase in the price level will increase real GDP OB In the long run, an increase in the price level decreases inflation, which will decrease real GDP OC. In the long run, an increase in the price level increases inflation, which will decrease real GDP OD. Changes in the price level do not affect the level of GDP in the long run. CIDS Price level (GDP deflator) 123 113- 103- Long-Run Aggregate Supply LRAS2 LRAS2 LRAS23 Real GDP (trillions of $)
Price Level LAS AS1 AD AS2 Real GDP Refer to the graph above to answer this question. If the economy was initially at point A, what would a movement to point B suggest? Select one: O a. The movement could be the result of an increase in nominal wages Ob. The movement could be the result of increased government spending. O c. The movement could be the result of an increase in aggregate demand. d. The movement could be the result of a decrease in the costs of production. O
Suppose you read in the Wal Street Journal that, during the fourth quarter of 2020, the U.S. economy expanded at the fastest rate in two decades. It follows that one would expect in the unemployment rate and. in real GDP during the fourth quarter of 2020. O a. a decrease; a decrease O b. an'increase; an increase O c. a decrease; an increase O d. an increase; a decrease Next page
Assume an economy operates in the intermediaterange of its aggregate supply curve. State thedirection of shift for the aggregate demandor aggregate supply curve for each of thefollowing changes in conditions. What is theeffect on the price level? On real GDP? Onemployment?a. The price of crude oil rises significantly.b. Spending on national defense doubles.c. The costs of imported goods increase.d. An improvement in technology raises laborproductivity.
"The following chart indicates the aggregate demand (AD) and short-run aggregate supply (SRAS) schedules of decision- makers for the current period. Both buyers and sellers previ- ously anticipated that the price level during the current period would be P 105 a. Indicate the quantity of GDP that will be produced during this period. b. Will it be a long-run equilibrium level of GDP? Why or why not? c. What will the relationship between the actual and natural rates of unemployment be during the period? Explain 20 your answer.
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How might deflation set off further deflation? O If prices are falling in the economy, this will cause a decrease in the number of goods exported from the country and thus cause prices to fall further. O Falling prices cause firms to increase production, and the increase in supply causes prices to fall further. O Falling prices may cause people to defer spending in expectation of further lower prices, and this leads to more deflation. O Falling prices can increase the nominal interest rates in the economy and reduce consumption. tv
Which of the following will NOT shift the ADTT curve? O a. A rise in consumer confidence O b. A rise in interest rates O c. A rise in government spending O d. A rise in exports