According to the Keynesian model of macroeconomic equilibrium, a decrease in aggregate demand Select one: O a. will cause the price level to fall substantially. O b. will cause an increase in aggregate supply that will restore full employment. O c. will not cause unemployment. O d. will not cause nominal wages to decline sufficiently to restore full employment.

Q: The determinants of aggregate demand are factors that can cause the curve to change, they include: O…

A: Aggregate demand basically refers to the total/entire quantity of demand for all final products and…

Q: The economy is able to self correct if: O prices and wages are flexible upward in recession O prices…

A: Economic self is the capacity of people and families to keep up with adequate pay to reliably meet…

Q: The curve that is sometimes called the "long-run aggregate supply curve" (vertical Y*) relates the…

A: The aggregate supply is the total amount of services and commodities that firms in an economic plan…

Q: Let's assume that the economy of a country is experiencing sticky wages and sticky prices. One of…

A: The link between the amount of a product provided and its price, while maintaining other variables…

Q: In the short run, an increase in Aggregate Demand will result in: O An increase in the price level…

A: The increase in AD shifts the AD to the right which increases both price level and GDP. The correct…

Q: Consider aggregate supply and then choose the statement that is correct. O A. Along the AS curve, a…

A: Aggregate demand is the total goods and services that are demanded by the people in the economy at…

Q: The long-run aggregate supply curve is a vertical line passing through Select one: Oa the natural…

A: The long-run aggregate supply curve is a vertical line passing through full employment level of…

Q: Which of the following causes the short-run aggregate supply curve to shift to the right? O A. an…

A: The short-run aggregate supply (SRAS) curve represents the relationship between the price level and…

Q: in the 1970s, the price of oil was extremely high. This shock caused a O shift to the left in the…

A: Aggregate demand curve is defined as the curve which shows the relationship between price level and…

Q: At which range the economy is producing at full employment according to the aggregate supply curve.…

A: The economies around the globe tend to operate upon the activities done by various entities. These…

Q: The long-run aggregate supply curve is Select one: O a.a vertical line through the non-inflationary…

A: The long-run aggregate supply curve demonstrates that the change in aggregate demand would not make…

Q: e le öf inputs.

A: Aggregate supply curve is defined differently according to different economists. The classical…

Q: The economy begins in a long-run equilibrium. Then something causes AD to decrease. What would…

A: A given economy's aggregate demand is the total amount of products and services bought over a…

Q: Suppose the inflation rate Tt rises and the central bank raises the nominal interest rate. This…

A: When talking about AE curve and AD curve, they are the tools used by Keynesian economists to explain…

Q: Assume the economy is initially operating at the natural level of output. Which of the following…

A: The natural level of production of a system exists if all materials obtainable are used effectively.

Q: AS' AS Price Level P2 P1 AD Real National Income Y2 Y1 8. The graph above reflects a significant…

A: Increase in oil prices increase cost of production that discourages firms to produce. This leads to…

Q: Which of the following will NOT shift the Long run Aggregate Supply (LAS) curve an increase in the…

A: The Long-Run Aggregate Supply (LAS) curve is a graphical representation in macroeconomics that shows…

Q: The short-run aggregate supply curve will shift to the left if: O A) the aggregate price level…

A: Aggregate supply refers to the total amount of goods and services that the producers are willing to…

Q: Figure 11.2 shows the relationship between the price level and real GDP. Which of the following is…

A: Aggregate demand is the sum of consumption, investment, government spending and net export. This…

Q: When there ae no unplanned inventory changes, the economy in a short run equilibrium and in a long…

A: In an economy, unplanned inventory refers to the amount of output that left unsold withthe sellers.

Q: In the dynamic model of AD-AS in the diagram to the right, if the economy is at point A in year 1…

A: In AD/ AS graph, a  rightward shift or increase in Aggregate demand will make output to rise along…

Q: An economy at a full-employment equilibrium experiences an increase in aggregate demand. The…

A: An economy will experience a stable aggregate whenever each employee has a stable income level. The…

Q: 2. The slope and position of the long-run aggregate supply curve Which of the following factors will…

A: Factors that will increase economy's potential to produce, will shift the long run aggregate supply…

Q: The total amount of goods and services that firms are willing and able to sell at a given price…

A: a. Aggregate supply - It is the sum total of the supplies by all the firms. b. Full employment - It…

Q: Refer to the information provided in the figure at right to answer the question that follows. The…

A: The goods and services  produced in the economy and its total demand  are known as aggregate demand.…

Q: If the unemployment rate is the natu O A. greater than; decreasing O B. less than; decreasing O C.…

A: Suppose the unemployment rate is below the natural rate. We would expect to see: GDP above potential…

Q: Net investment equals O gross investment plus depreciation. O gross investment minus depreciation. O…

A:

Q: Refer to the graph to the right. The shift from AS, to AS, shown in the diagram is referred to as…

A: Aggregate supply curve is a positively sloped curve which shows the relationship between price level…

Q: Which of the following characteristics is NOT consistent with an upward-sloping AS curve? O when…

A: The curve that depicts the quantities of goods being supplied by producers at different levels of…

Q: Price level Potential output SRAS P3 P2 Real GDP Y1 Y3 fer to Exhibit 10.1, which shows the…

A: The short run supply curve slopes upward signifying the positive relationships between the price and…

Q: Moving along the aggregate supply curve, O A. technology advances. O B. the quantity of capital used…

A:

Q: A price-level increase, Ceteris Paribus, will: Select one: O a. cause an upward movement along the…

A: Aggregate demand curve: - Aggregate demand curve shows the total demand of goods and services in an…

Q: An inflationary gap is automatically closed by wages that shift the O a) rising; SRAS curve…

A: In an economy, inflationary situation arises when there is a shortage of output as the aggregate…

Q: Identify which curve on the previous graph corresponds to each of the following descriptions. If the…

A: Short-run equilibrium is when aggregate demand equals short-run aggregate supply. Shifts in both…

Q: The figure below shows equilibrium in an aggregate demand-aggregate supply model. In this figure,…

A: Answer: d ( the actual price level is lower than expected) Explanation: If the actual price level is…