Use the following information to answer questions 5 through 7:The graph below shows the AD-AS diagram for Spain. All numbers are in billions.1100-1000AD900800700-600 -500400-309RASE200.10-LRAS100Z00, GB5006007008009001000105. What is the level of Potential GDP in Spain?6. What is the size of real GDP in the short-run equilibrium?7. What is the price level in the short-run equilibrium?

The total monetary or market worth of all finished goods and services produced inside a country's…

Answered: 5. What is the level of Potential GDP…

5. What is the level of Potential GDP in Spain? 6. What is the size of real GDP in the short run equilibrium? 7. What is the price level in the short-run equilibrium?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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.
hi, this is long-run economic performance chapter question at macroeconomics. thanks
please state which one the answer is Many thanks - question is attached
Suppose that the economy is at long-run equilibrium. If there is a sharp decline in the stock market combined with a significant increase in immigration of skilled workers, then in the short run a. real GDP will rise and the price level might rise, fall, or stay the same. b. real GDP will fall and the price level might rise, fall, or stay the same. c. the price level will rise, and real GDP might rise, fall, or stay the same. d. the price level will fall, and real GDP might rise, fall, or stay the same.
Suppose the economy is in the long-run equilibrium. b. Now suppose war in the world's main oil- producing region sharply reduces the world oil supply, causing oil prices to rise and increasing the costs of producing goods and services in this economy. Use your diagram to show what happens to output and the price level in the short run. c. Use the sticky-wage theory of aggregate supply to explain what will happen to output and the price level in the long run (assuming there are no policy changes). What role does the expected price level play in this adjustment? Be sure to illustrate your analysis in a graph.
2. The economy is currently in the long-run macroeconomic equilibrium. a) Using an appropriately labelled graph, show the economy's current state. b) Suppose, the government decides to increase income taxes. What kind of policy did the government take? On the same diagram as a) show the effect of this policy in the short run and explain.
6. Suppose political turmoil causes a significant decrease in oil production in the middle east. How will real GDP, employment, and the general price level be affected in the short run? 7. How will the event described in question 6 affect real GDP, employment, and the general price level in the long run? Explain in words and a graph.
If there is an increase in the price of oil, a. the output level increase in the short-run but will decline in the medium-run b. the output level will fall in the medium run and the interest rate will rise in the short-run c. the output level will fall in the medium run and the price level will fall in the medium run d. the interest rate will rise in the short-run but will fall in the medium run Please i need it with proper justification to understand. I am unable to find it.
If the economy starts at O and moves to R in the short run, the economy PRICE LEVEL R LRAS O O moves to O in the long run. moves to P in the long run. moves to Q in the long run. a QUANTITY OF OUTPUT O stays at R in the long run. AD₂ SRAS, SRAS, AD
f Country X is currently at full employment. A fall in future profit will reduce SAS and hence increase price and real GDP. reduce LAS and hence raise price but reduce real GDP. reduce AD and hence raise price and real GDP. reduce AD and hence reduce price and real GDP.
Question 6 According to the Real Business Cycle, an increase in government spending Shifts the long-run supply to the right O Increases price without any effect on output O Increases output without any effect on price O Increases both price and output