Topic; Determinants of aggregate supply.Fill in the blanks 6. Determinants of aggregate supplyThis graph shows an increase in aggregate supply in a hypothetical economy where the currency is the dollar. Specifically, the short-run aggregatesupply curve (SRAS) shifts to the right from SRAS, to SRAS₂, causing the quantity of output supplied at a price level of 125 to rise from $250billion to $350 billion.PRICE LEVEL200175150125100755025+SRAS,SRAS0050100150200250300350400REAL GDP (Billions of dollars)?The following table lists several determinants of aggregate supply. Fill in the table by indicating the changes in the determinants necessary to increaseaggregate supply.DeterminantNominal Wage RatePrices of Nonlabor InputsProductivityChange Needed to Increase Short-Run Aggregate SupplyIncrease or decreaseIncrease or decreaseIncrease or decrease

Ans. ) In the given question, there is a rightward shift in the short-run aggregate supply curve…

Answered: 6. Determinants of aggregate supply…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 8PA

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8. Which of the following explain why the Aggregate Demand curve is downward sloping? a) An increase in the price level decreases the purchasing power of money denominated wealth, which in turn causes a decline in on consumption spending. b) An increase in the price level decreases the purchasing power of money, which means that more money is needed to purchase goods. This causes buyers of investment and durable goods to require bigger loans to finance their purchases. This, in turn, causes an increase in the demand for loanable funds which leads to a higher interest rate. A higher interest rate will reduce the real purchases of investment and durable goods. c) An increase in the price level makes goods relatively more expensive to foreigners causing them to buy less which means that net exports will decline. d) All of the above. e) None of the above. 9. Which of the following explain why the Aggregate Supply curve is upward sloping?…
Refer to the table below. Real Output Demanded, Billions Price Level Real Output Supplied, Billions $ 506 108 $ 513 508 104 512 510 100 510 512 96 507 514 92 502 Instructions: Enter your anwers as whole numbers. A). What is the equilibrium level of output? What is the equilibrium price level? B). Suppose that aggregate demand increases such that the amount of real output demanded rises by $ 7 billion at each price level. Insert the new values for real output demanded in the table below. Real Output Demanded, Billions New Real Output Demanded, Billions Price Level Real Output Supplied, Billions $ 506 108 $ 513 508 104 512 510 100 510 512 96 507 514 92 502 What is the new equilibrium level of output? What is the new equilibrium price level? By what percentage will the price level increase? Will this inflation be demand-pull inflation or will it be cost-push inflation? C) If potential real GDP ( that is, full-employment GDP) is $ 510…
2. Why does the aggregate demand curve slope downward? The following graph shows the aggregate demand curve in a hypothetical economy. Assume that the economy's money supply remains fixed. PRICE LEVEL 160 150 140 130 120 110 100 90 80 Aggregate Demand Aggregate Demand 0 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars) Which of the following are reasons the aggregate demand curve is downward sloping? Check all that apply. A lower price level makes domestically produced goods less expensive than foreign goods. A higher price level decreases the real value of consumers' assets. A lower price level increases consumption through the income effect. As the aggregate price level rises, the cost of borrowing money will the quantity of output demanded to effect. causing This phenomenon is known as the
9. Which of the following will shift the aggregate demand curve to the right, ceteris paribus? A) an increase in interest rates B) a decrease in disposable income C) a decrease in expected profits for firms D) an increase in net exports 10. If the U.S. dollar decreases in value relative to other currencies, how does this affect the aggregate demand curve? A) This will move the economy up along a stationary aggregate demand curve. B) This will move the economy down along a stationary aggregate demand curve. C) This will shift the aggregate demand curve to the left. D) This will shift the aggregate demand curve to the right
2. Suppose an economy is described by the following aggregate demand and short-run aggregate supply curves. The potential level of output is $10 trillion. Aggregate Quantity of Goods and Services Price Level Demanded Supplied 3.0 $11.0 trillion $9.0 trillion 3.4 $10.8 trillion $9.2 trillion 3.8 $10.6 trillion $9.4 trillion 4.2 $10.4 trillion $9.6 trillion 4.6 $10.2 trillion $9.8 trillion 5.0 $10.0 trillion $10.0 trillion 5.4 $9.8 trillion $10.2 trillion 5.8 $9.6 trillion $10.4 trillion 6.2 $9.4 trillion $10.6 trillion 6.6 $9.2 trillion $10.8 trillion 7.0 $9.0 trillion $11.0 trillion Draw the aggregate demand and short-run aggregate supply curves. What is the initial real GDP? What is the initial price level? What kind of gap, if any, exists? After the increase in health-care costs, each level of real GDP requires an increase in the price level of o.8. For example, producing $9.0 trillion worth of goods and services now requires a price level of 3.8. What is the short- run equilibrium…
QUESTION 1 What causes the aggregate demand curve to shift to the right? An increase in net exports O an increase in labor (L) O A decrease in net exports O An increase in the inputs of production
160 150 140 130 120 110 100 PRICE LEVEL Aggregate Demand 0 100 200 300 400 500 000 700 800 REAL GDP (Billions of dollars) Which of the following are reasons the aggregate demand curve is downward sloping? Chelk all that apply. A higher price level decreases consumption through the substitution effect. A lower price level makes domestically produced goods less expensive than foreign goods. A higher price level decreases the real value of consumers' assets. As the aggregate price level rises, the cost of borrowing money will This phenomenon is known as the 8 90 Aggregate Demandi 80 causing the quantity of output demanded to: effect.
1. The short-run aggregate supply curve is and the long-run aggregate supply curve is A- upward sloping; horizontal B- vertical; upward sloping C- vertical; horizontal D- upward sloping; vertical
2. Use the model of aggregate demand and short-run aggregate supply to explain how each of the following would affect real GDP and the price level in the short run. an increase in government purchases a reduction in nominal wages a major improvement in technology a reduction in net exports
✔ 2 Aplia Assignment Ch 20 4. Determinants of aggregate supply The following graph shows a decrease in short-ron aggregate supply (AS) in a hypothetical economy where the currency is the dollar Specifically, the short-un aggregate supply curve shifts to the left from AS, to AS, causing the quantity of output supplied at a price level of 100 to fall from $200 billion to $150 billion K 1 1 **### PRICE LEVEL 200 20 QUANTITY OF OUTPUT 380 400 The following table lists several determinants of short-run aggregate supply. Regulations on the firm Tax rates Input prices Complete the table by selecting the changes in each scenario necessary to decrease short-run aggregate supply Change Necessary to Decrease AS Grade It Now Save & Continue Continue without saving
3. Explain whether each of the following events will increase, decrease, or have no effect on longrun aggregate supply in your country. a. There is an increase in immigration into your country. b. Your government introduces a minimum wage above the market-clearing wage rate. c. Intel invents a new and more powerful computer chip. d. A severe flood damages factories.
Explain the influence of the following events on the quantity of real GDP supplied and aggregate supply in India. When fuel prices rise When the price level in India increases A. short-run aggregate supply decreases; the quantity of real GDP supplied increases O B. long-run aggregate supply decreases; short-run aggregate supply increases OC. long-run aggregate supply increases; the quantity of real GDP supplied increases OD. short-run aggregate supply increases; the quantity of real GDP supplied decreases The graph gives the long-run aggregate supply curve and the short-run aggregate supply curve for India. Suppose Canadian firms move their call handling, IT, and data functions to India. The full-employment price level does not change. If long-run aggregate supply changes, draw the new long-run aggregate supply curve and label it. If short-run aggregate supply changes, draw the new short-run aggregate supply curve and label it. Draw a point at the full-employment price level at…

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