A reasonable dynamic assumption for the IS-LM model is that Select one: a. the economy is always on both the IS and LM curves. b. the economy is always on the IS curve, but moves only slowly to the LM curve. O c. adjustment to the new IS-LM equilibrium is instantaneous after an LM shift, but not after an IS shift. d. the economy is always on the LM curve, but moves only slowly to the IS curve. e. the money market is quick to adjust, but the bond market adjusts more slowly.

A reasonable dynamic assumption for the IS-LM model is that Select one: a. the economy is always on both the IS and LM curves. b. the economy is always on the IS curve, but moves only slowly to the LM curve. O c. adjustment to the new IS-LM equilibrium is instantaneous after an LM shift, but not after an IS shift. d. the economy is always on the LM curve, but moves only slowly to the IS curve. e. the money market is quick to adjust, but the bond market adjusts more slowly.

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

Question Completion Status: ↳ A Moving to another question will save this response. Question 29 If the government decided to go to war on Russia, how would that impact the aggregate model? O a. This would not impact the aggregate model at all. O b. This would increase the price level which would shift the aggregate demand curve downwards. O c. It might shift the aggregate demand curve upward or to the right, and maybe shift the LRAS to the left. O d. It would shift the LRAS to the right. A Moving to another question will save this response. 1 2 # 3 4
Price level Figure 10-7 LRAS SRAS₂ SRASO J H SRAS ADO Real GDP Refer to Figure 10-7. Starting from long-run equilibrium at point F, at which of the following points would short-run equilibrium occur following a drought in the Midwestern states? O al O b. F OC.G O d.H
D Question 8 When the government lowers income taxes, consumption is O stimulated; rightward shift of O stimulated; movement down along O reduced; leftward shift of O reduced; movement up along Question 9 An increase in the price of a nonlabor input such as oil will cause a movement up the SRAS curve. a leftward shift in the SRAS curve. a rightward shift in the SRAS curve. no change regarding the SRAS curve. , causing a the AD curve.
In the figure, as the price level increases the aggregate demand curve will Price level (GDP price index, 2012 = 100) A. not shift. O B. not shift, but the aggregate demand curve will change so that it is positively sloped. O C. shift from AD, to AD, O D. shift from AD, to AD, and then back to AD,. E. shift from AD, to AD3. AD2 AD3 AD1 Real GDP (trillions of 2012 dollars)
Refer to Figure 12-3. Suppose the economy is at point C. If investment spending decreases in the economy, where will the eventual long-run equilibrium be? Figure 12-3 Price level (GDP deflator, 2000100) OA O O B C D LRAS SRAS, SRAS * AD₁ AD₂ 0 None of the above Real GDP (trillions of 2000 dollars)
Which of the following would be one of the factors that shift the aggregate demand curve? A change in: Domestic resource availability O Prices of imported resources O Property values O Productivity
Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point W. The price level is Po. Now, suppose there is an exogenous fall in the price level to P2. Which of the following statements describes the likely macroeconomic effects? O A. The AE curve shifts to AE₁, a new equilibrium is established at point V, and the AD curve shifts from AD to AD¹, and equilibrium moves from point B to point D. OB. The AE curve shifts to AE2, a new equilibrium is established at point U, and the AD curve shifts from AD to AD¹, and equilibrium from point B to point D. Ⓒ C. The AE curve shifts to AE2, a new equilibrium is established at point U, and the economy moves from point B to point C along AD. O D. The AE curve shifts to AE₁, new equilibrium is established at point V, and the economy moves from point B to point C along AD⁰. Desired Aggregate Expenditure Price Level 759² Y₁ W Yo Y₂ Real GDP AE=Y AE₂ Real GDP AEo AE₁ Q ✔ Q
Which of the following government actions will shift the aggregate demand right? Select one: O O O a. a rise in personal income taxes b. closing up a military facility to reduce costs c. a repeal of an investment tax credit d. an increase in the money supply
tion 6 According to aggregate supply and aggregate demand analysis, what happens to P (price level) and Q (GDP) if X increases? Oa. Prices decrease and GDP decreases. O b. Prices increase and GDP decreases. Oc Prices stay the same and so does GDP i AS and AD curves shift by the same amount O d. Prices increase and GDP increases. estion will save this response.
Price Level LAS SAS, SAS, AD SAS, AD, AD, Real Output Refer to the graph. Suppose the economy is at SAS, and AD₂. What is a possible way the economy can return to potential output? What dynamic price level feedback effect could prevent the return to potential output? How would the dynamic price level feedback effect show up in the graph? O A decrease in asset prices in the economy; a decrease in asset prices would further decrease AD; a shift in AD from AD2 to AD3 O A decrease in material costs in the economy; a decrease in material costs would decrease AD; a shift in AD from AD2 to AD1 A decrease in wages in the economy; a decrease in wages would further decrease AD; a shift in AD from AD2 to AD3 A decrease in wages in the economy; a decrease in wages would further decrease AD; a shift in AD from AD2 to AD1
In order to shift the vertical aggregate supply curve to the left, which of the following would have to occur? O expansion of potential GDP O increase in productivity flexible wage and price adjustments O breakdown of key market institutions
Price level (P) LRAS SRAS2 SRAS, В A AD2 AD, Real GDP (7) Based on the graph, a decrease in Point D to Point A could cause the economy to move from government spending exports on apples restrictions from the Environmental Protection Agency on car production in the U.S. inflation the demand for consumer goods Question 8 Suppose housing values fell during the recession of 2008. Therefore, O the price level will fall as the aggregate demand curve shifts to the left.