22. When the aggregate demand curve and the short-run aggregate supply curve intersect, A) the long-run aggregate supply curve must also intersect at the same point. B) inflation must be increasing. C) structural and frictional unemployment equal zero. D) the economy is in short-run macroeconomic equilibrium. 23. Interest rates in the economy have fallen. How will this affect aggregate demand and equilibrium in the short run? A) Aggregate demand will rise, the equilibrium price level will rise, and the equilibrium level of GDP will rise. B) Aggregate demand will rise, the equilibrium price level will fall, and the equilibrium level of GDP will rise. C) Aggregate demand will fall, the equilibrium price level will fall, and the equilibrium level of GDP will fall. D) Aggregate demand will fall, the equilibrium price level will rise, and the equilibrium level of GDP will fall.

22. When the aggregate demand curve and the short-run aggregate supply curve intersect, A) the long-run aggregate supply curve must also intersect at the same point. B) inflation must be increasing. C) structural and frictional unemployment equal zero. D) the economy is in short-run macroeconomic equilibrium. 23. Interest rates in the economy have fallen. How will this affect aggregate demand and equilibrium in the short run? A) Aggregate demand will rise, the equilibrium price level will rise, and the equilibrium level of GDP will rise. B) Aggregate demand will rise, the equilibrium price level will fall, and the equilibrium level of GDP will rise. C) Aggregate demand will fall, the equilibrium price level will fall, and the equilibrium level of GDP will fall. D) Aggregate demand will fall, the equilibrium price level will rise, and the equilibrium level of GDP will fall.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

2) Use the table above to answer the following questions.a) What is the value of real GDP and price level at the long run macroeconomic equilibrium?b) What is the value of real GDP and price level at the short run macroeconomic equilibrium?c) Is the short-run macroeconomic equilibrium a full-employment equilibrium, below full-employment equilibrium, or above full-employment equilibrium?d) How will this economy return to its long run equilibrium? Explain using self-correctingmechanism.
Assuming a stable short-run supply curve, what will happen if there is a shift in aggregate demand? a) Profits and output increase in the long-run. b) Unemployment decreases in the long-run. c) Profits and output decrease in the short-run. d) Unemployment increases in the short-run. e) Unemployment and prices move in opposite directions in the short-run.
4.1 Why does the short-run aggregate supply curve slope upward? 4.2 Explain why the long-run aggregate supply curve is vertical. Then, (verbally and graphically) explain how each of the following events would affect the long-run aggregate supply curve. a. A lower price levels b. A decrease in the labor force c. A decrease in the quantity of capital goods d. Technological change
Economics 8
Determine whether each of the following would cause a shift of the aggregate demand curve, a shift of the aggregate supply curve, a shift in neither curve, or shift in both curves. If a shift is caused, indicate which curve shifts, and in which direction it shifts. What happens to aggregate output and the price level in each case? 4. The wages rate decreases.
13. The level of aggregate supply, in the long run, is not affected by A) changes in technology. B) changes in the capital stock. C) changes in the price level. D) changes in the number of workers. 14. The long-run aggregate supply curve will shift to the right if : A) the economy experiences technological change. B) there is a decrease in population. C) the economy experiences high levels of inflation. D) net exports decrease.
None
do fast.
q. Consider the following scenarios and briefly explain how each scenario would affect short-run aggregate supply (SAS), long-run aggregate supply (LAS) or aggregate demand (AD) in Canada. In some situations, more than one may be affected. 1. Canada produces larger number of university graduates who possess higher levels of education and skill. 2. Depletion of resources cause increase in the prices of key inputs in production. 3. Canada’s trading partners experience higher rates of economic growth. 4. Increase in oil prices raises the value of Canadian dollar.
If a graph showed aggregate demand and short-run aggregate supply intersecting at $18 trillion of GDP, and the long-run aggregate supply curve was situated at $20 trillion of GDP, this would indicate that the economy was Select one: a. at full employment. b. experiencing high inflation. c. in a recession. d. in an expansion.
Suppose that the economy of Monaco is represented by the aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS) curves in the accompanying graph. a. Based on the graph, Monaco is experiencing a deflationary gap. currently at long-run equilibrium. experiencing an inflationary gap. b. Which of the following policies eliminate this phenomenon? A birth control subsidy An increase government purchases of goods and services An increase in taxes An increase in government transfers A cut in taxes c Suppose that the government implements the policy proposed in part b. Shift the aggregate demand curve on the graph accordingly. Aggregate price level LRAS 7 6 X 5 4 3 AD 2 3 10 9 8 2 1 0 0 1 4 5 6 Real GDP 7 8 SRAS 9 10