7. Determinants of aggregate supplyThe following graph shows an increase in short-run aggregate supply (AS) in a hypothetical economy where the currency is the dollar Specifically, theshort-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 $200billion to $250 billion.200PRICE LEVEL175150100765026O0M400II150200 250QUANTITY OF OUTPUTAS,Regulations on the firmHuman capitalInput pricesAS100350The 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

The aggregate supply curve shows the combination of the price level and quantity of output supplied…

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.

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.

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

8. Economic fluctuations I The following graph shows the economy in long-run equilibrium at the expected price level of 120 and the natural level of output of $600 billion. Suppose the government increases spending on building and repairing highways, bridges, and ports. Shift the short-run aggregate supply (AS) curve or the aggregate demand (AD) curve to show the short-run impact of the increase in government spending. 240 AS 200 AD 160 AS 120 80 AD 40 200 400 600 800 1000 1200 OUTPUT (Billions of dollars) In the short run, the increase in government spending on infrastructure causes the price level to the price level people expected and the quantity of output to the natural level of output. The increase in government spending will cause the unemployment rate to the natural rate of unemployment in the short run. Again, the following graph shows the economy in long-run equilibrium at the expected price level of 120 and the natural level of output of $600 billion, before the increase in…
7. The long-run aggregate supply curve and short-run adjustments Suppose an economy's short-run aggregate supply curve (SRAS), current equilibrium aggregate price level (P₁), and real GDP (Q1) are shown on the graph that follows. The economy currently has Natural Real GDP (QN) of $6 trillion. Use this information to place the orange long-run aggregate supply curve (LRAS, square symbols) in the correct position on the graph. 20 PRICE LEVEL 0 2 4 6 Q₁ REAL GDP (Trillions of dollars) 8 SRAS 10 LRAS
3. Why the aggregate demand curve slopes downward The graph below shows the aggregate demand (AD) curve for a hypothetical economy. At point X, the quantity of output demanded is $500 billion, and the price level is 120. Moving up along the AD curve from point X to point Y, the quantity of output demanded falls to $300 billion, and the price level rises to 140. PRICE LEVEL 170 160 150 140 130 120 110 100 90 Y X AD (?
8. Economic fluctuations I The following graph shows the economy in long-run equilibrium at the expected price level of 120 and the natural level of output of $600 billion. Suppose a sudden and severe contraction in the housing market reduces the value of homes and causes consumers to spend less. Shift the short-run aggregate supply (AS) curve or the aggregate demand (AD) curve to show the short-run impact of the housing market slump. (2) 240 AS 200 AD 140 AS 120 80 AD 40 200 400 800 1000 1200 OUTPUT (BIlons of dollars) In the short run, the decrease in consumption spending associated with the housing market contraction causes the price level to * the price level people expected and the quantity of output to v the natural level of output. The housing market slump will cause the unemployment rate to the natural rate of unemployment in the short run. Again, the following graph shows the economy in long-run equilibrium at the expected price level of 120 and the natural level of output of…
4.1 Distinguish between the short-run aggregate supply curve and the long-run aggregate supply curve.
3
✔ 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
9. Problems and Applications Q3 Suppose an economy is in long-run equilibrium. The central bank raises the money supply by 5 percent. Use your diagram to show what happens to output and the price level as the economy moves from the initial to the new short-run equilibrium. Price Level LRAS Aggregate Supply Aggregate Demand Quantity of Output Aggregate Demand 10 Aggregate Supply Now adjust the graph to show the new long-run equilibrium. What causes the economy to move from its short-run equilibrium to its long-run equilibrium? Nominal wages, prices, and perceptions adjust upward to this new price level. The government increases taxes to curb aggregate demand. The government increases spending to increase aggregate demand. Nominal wages, prices, and perceptions adjust downward to this new price level. According to the sticky-wage theory of aggregate supply, nominal wages at the initial equilibrium are nominal wages at the short-run equilibrium resulting from the increase in the money…
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.
PQ 27 How does an appreciation of a country's currency affect its aggregate supply curves, when imported intermediate inputs are sizable?