a. Complete the following diagram. 1.) Using the line drawing tool, draw a long-run aggregate supply curve for any value of GDP greater than $2 trillion. Label it 'LRAS'. 2.) Using the 3-point curved line drawing tool, draw a short-run aggregate supply curve. Label it 'SRAS'. Carefully follow the instructions above, and only draw the required objects. b. Which of the following factors will shift the short-run aggregate supply curve but not the long-run AS? OA. An economy wide decrease in wages. OB. A permanent decrease in oil production. OC. A decrease in labor productivity OD. A decrease in capital c. If petroleum prices increase temporarily the curve would shift to the

a. Complete the following diagram. 1.) Using the line drawing tool, draw a long-run aggregate supply curve for any value of GDP greater than $2 trillion. Label it 'LRAS'. 2.) Using the 3-point curved line drawing tool, draw a short-run aggregate supply curve. Label it 'SRAS'. Carefully follow the instructions above, and only draw the required objects. b. Which of the following factors will shift the short-run aggregate supply curve but not the long-run AS? OA. An economy wide decrease in wages. OB. A permanent decrease in oil production. OC. A decrease in labor productivity OD. A decrease in capital c. If petroleum prices increase temporarily the curve would shift to the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

a. Complete the following diagram.
1.) Using the line drawing tool, draw a long-run aggregate supply curve for any value of GDP greater than $2 trillion. Label it 'LRAS".
2.) Using the 3-point curved line drawing tool, draw a short-run aggregate supply curve. Label it 'SRAS'.
Carefully follow the instructions above, and only draw the required objects.
b. Which of the following factors will shift the short-run aggregate supply curve but not the long-run AS?
O A. An economy wide decrease in wages.
OB. A permanent decrease in oil production.
OC. A decrease in labor productivity
OD. A decrease in capital
c. If petroleum prices increase temporarily the
e to search
O
curve would shift to the ▼

Price level
2
4
6
8 10 12
14
Real GDP ($ trillions)
16
18
20

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The graph to the right shows an economy's aggregate demand curve. Show the determination of the economy's long-run macroeconomic equilibrium by (i) using the Line tool to draw and label the long-run aggregate supply curve to show an equilibrium and (ii) using the Point tool to identify the equilibrium point. Label this point E. Price level Real GDP AD E
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