We confused on this graph for economics. I know option C. Is incorrect need help figuring out which multiple-choice option is correct According to the graphs, a decrease in the aggregate price level would cause a shift from:PlannedaggregatespendingDB45-degree lineAEAEY₁YzReal GDPAggregateprice levelF9-P2a. A to Bb. B to COCC to Bd. A to CGY₁Y₂ADReal GDP

Lower prices (downward movement on the AD curve) make people buy more (AD curve shifts right).This…

Answered: According to the graphs, a decrease in…

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section: Chapter Questions

Problem 7TY

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Find equilibrium GDP using the following macroeconomic model
Given the macro economic data below, draw a graph to illustrate if there is arecessionary gap in the given economy.Real GDP $1000BConsumption (100K is Autonomous) $600BInvestment $100BGovernment Spending $200BExport $50BImport $50BMarginal Propensity to Consume 0.50 AD (Expenditure) 45 degree  AD = AS $ 1000B AS (Real GDP) a. Calculate the size of the recessionary gap in the economy. b. What would happen to the recessionary gap if the government cut incometaxes by $50B? c. What would happen to the recessionary gap if the Fed increased discountrates? Explain your answer.
Only a change in the price level can cause shifts in both the aggregate expenditure line and the aggregate demand curve. a. True b. False
Suppose Mexico, one of our largest trading partners and purchaser of a large quantity of our exports, goes into a recession. Use the AD/AS model to determine the likely impact on our equilibrium GDP and price level.
Briefly explain the reason for the near-horizontal shape of the SRAS curve on its far left.
Suppose concerns about the size of the federal budget deficit lead the U.S. Congress to cut all funding for research and development for ten years. Assuming this has an impact on technology growth, what does the AD/AS model predict would be the likely effect on equilibrium GDP and the price level?
How is recession illustrated in an AD/AS model?
Name some factors that could cause the SRAS curve to shift, and say whether they would shift SRAS to the right or to the left.
The short run aggregate supply curve was constructed assuming that as the price of outputs increases, the puce of inputs stays the same. How would an increase in the prices of important inputs, like energy, affect aggregate supply?
Which of the following will NOT shift the ADT curve? O a. A rise in government spending O b. A rise in exports Ос. A rise in interest rates O d. A rise in consumer confidence
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According to the graphs, a decrease in the aggregate price level would cause a shift from: Planned aggregate spending D B 45-degree line AE AE Y₁ Yz Real GDP Aggregate price level F 9- P2 a. A to B b. B to C OCC to B d. A to C G Y₁ Y₂ AD Real GDP