According to new classical economists, if a decrease in aggregate demand is correctly anticipated, the short-run aggregate supply curve will shiftso that there will be no change in Real GDP.same time the AD curve shiftsO a rightward; rightwardO b. leftward; rightward icleftward; rightwardO d. rightward; leftwarde none of the aboveGHide FeedbackIncorrectat the The economy is in long-run equilibrium when government unexpectedly increases aggregate demand. The expected inflation rate is slow to adjust to the higheractual) inflation rate. If follows that in the short run, according to the Friedman natural rate theory.rises and thefalls.a. the unemployment rate, price levelb. Real GDP rises, unemployment ratec. nominal interest rate, real interest rated. the unemployment rate, Real GDP levele none of the above

According to new classical economists, if a decrease in aggregate demand is correctly anticipated, the short-run aggregate supply curve will shift so that there will be no change in Real GDP. same time the AD curve shifts O a rightward; rightward O b. leftward; rightward cleftward; rightward d. rightward; leftward Onone of the above Hide Feedback O 0 Incorrect at the

According to new classical economists, if a decrease in aggregate demand is correctly anticipated, the short-run aggregate supply curve will shift so that there will be no change in Real GDP. same time the AD curve shifts O a rightward; rightward O b. leftward; rightward cleftward; rightward d. rightward; leftward Onone of the above Hide Feedback O 0 Incorrect at 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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1)what is the correct answer? 2) Which should come to the void?
Refer to the graph to the right. The shift from AS, to AS, shown in the diagram is referred to as AS, AS, a(n) O A. decrease in unit costs. O B. negative aggregate supply shock. O. positive aggregate supply shock. OD. increase in unit costs. Real GDP Price Level
LRAS SRAS, SRAS2 `AD1 AD2 Y In the AS-AD model shown, points A and C characterise an allocation with... Select one: O a. Full employment and varying inflation. O b. temporary unemployment and falling interest rates. O c. Full employment and varying price levels. O d. Without further information on point B, no statement is possible. B
Think of the AD-AS model with an upward-sloping AS curve. Suppose the economy is initially at its long-run equilibrium. What is the impact of an unexpected increase in money supply in the short run and in the long run? O a. In the short run, output rises above its natural level. In the long run, output returns to its natural level and the price level is higher than what it was initially. O b. In the short run, output falls below its natural level. In the long run, output returns to its natural level and the price level is higher than what it was initially. O c. In the short run, output rises above its natural level. In the long run, output returns to its natural level and the price level is lower than what it was initially. O d. In the short run, output falls below its natural level. In the long run, output returns to its natural level and the price level is lower than what it was initially.
Arrange these statements in sequence to explain why the short run aggregate supply (SR AS) curve slopes upward. Suppositions as a starting point Conclusion as to why the SR AS curve slopes upward Answer Bank At the macroeconomic level, the increase in aggregate demand (AD) corresponds to a shift in the firms' demand curve, whereas the firms'supply curve remains fixed. Since customers are demanding more of the firms'product, the firms' demand curves increase, which increases prices and output. The firms'willingness to supply more output at a higher price at a micro level shows a positive relationship, which is then also reflected at the macro level with an upward sloping SR AS curve.
4. Inflation and interest rates The following table gives the average nominal interest rates on six-month Treasury bills spanning the years 2004 and 2008, which determined the nominal interest rate paid by the U.S. government when it issued debt in that time period. The table also gives the inflation rate for the years 2004 to 2008. (All rates rounded to the nearest 0.1 percent.) Year 2004 2005 2006 2007 INTEREST RATE (Percent) 2008 5.0 6 6 Source: "FRED Economic Data," Federal Reserve Bank of St. Louis, last modified September 23, 2019, accessed September 24, 2019, https://fred.stlouisfed.org. On the following graph, use the orange points (square symbol) to plot the nominal Interest rates for the years 2004 to 2008. Next, use the green points (triangle symbol) toplot the real interest rates for those years. 2.0 1.0 o Nominal Interest Rate Inflation Rate (Percent) 1.6 -1.0 2003 O 2004 3.4 4.8 4.4 O 2005 1.6 2006 O 2007 2008 (Percent) 2.7 3.4 3.2 2004 2005 2.9 3.8 2008 YEAR 2007 2008…
Refer to the diagram that shows an AD/AS model for a hypothetical economy. Suppose the economy is in a short-run equilibrium at Y₁. An appropriate fiscal policy for attaining potential output (Y*) is a(n) O A. decrease in current imports. O B. increase in personal and corporate taxes. O C. decrease in current consumption. O D. increase in exports. Po B Y₁ Real GDP AD G
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Question 3 When placed in the AD/AS framework, the simple quantity theory of money requires O A horizontal AD curve. O A vertical AS curve. O A horizontal AS curve. O A vertical AD curve. Question 4 If decline in interest rates doesn't lead to increased investment then, O Unemployment will be the same. Real GDP will be the same as before. O Allof the above O AD curve will remain unchanged.
A Moving to another question will save this response. Question 21 An increase in wealth from a substantial increase in stock prices will move the economy along a fixed aggregate demand curve. O A. true. O B. false. A Moving to another question will save this response.
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