An economy at a full-employment equilibrium experiences an increase in aggregate demand. The unemployment rate O A. rises above; fall OB. falls below, rise O C. falls below; fall O D. rises above; rise its natural rate, and to return to the long-run equilibrium, the money wage rate begins to

An economy at a full-employment equilibrium experiences an increase in aggregate demand. The unemployment rate O A. rises above; fall OB. falls below, rise O C. falls below; fall O D. rises above; rise its natural rate, and to return to the long-run equilibrium, the money wage rate begins to

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

An economy at a full-employment equilibrium experiences an increase in aggregate demand.
The unemployment rate
O A. rises above; fall
OB. falls below; rise
OC. falls below; fall
O D. rises above; rise
its natural rate, and to return to the long-run equilibrium, the money wage rate begins to

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Suppose now the government passes a law that reduces unemployment benefits in a way that causes unemployed workers to seek out new jobs more quickly. This change in policy will cause the natural rate of unemployment to fall ▼ which will: O Not impact the long-run aggregate supply curve O Shift the long-run aggregate supply curve to the left O Shift the long-run aggregate supply curve to the right Complete the following table by determining how each event impacts the position of the long-run aggregate supply (LRAS) curve. An investment tax credit increases the rate at which firms acquire machinery and equipment. Many workers leave to pursue more lucrative careers in foreign economies. For environmental and safety reasons, the government requires that the country's nuclear power plants be permanently shut down. Direction of LRAS Curve Shift No shift ▼ No shift Right
Question 67 A prolonged period in which investment prices fall and usually occur when the economy is in a recession and unemployment is high, is O a Bull Market O a Bear Market O 52 Week Low Poison Pill
Refer to the information provided in the figure at right to answer the question that follows. The level of aggregate output that can be sustained in the long run without inflation O A. is $400 million. B. is $700 million. O C. is $800 million. O D. cannot be determined from this information because aggregate demand is not given. Price level, P LRAS AS :800 400 700 Aggregate output (income), Y ($ million)
If the unemployment rate is the natural rate, then we expect to see wages, causing the short - run aggregate supply curve to shift up. O A. greater than; decreasing O B. less than; decreasing OC. less than; increasing O D. greater than; increasing Click to select your answer. esc
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If you observed the equilibrium wage rate increasing while equilibrium employment increased, which of the following would be a possible explanation? There was: O a decrease in labor demand an increase in labor supply O a decrease in labor supply an increase in labor demand * Previous Next ASUS
Based on increasing gas prices in the United States.
Price level (GDP price index, 2012 = 100) Potential Potential GDP, AS, GDP2 AS2 Real GDP (trillions of 2012 dollars)
Assume this economy is currently producing full-employment real GDP of B at a current price level of E. What would happen in the short run if wages increase?
Price Level Long-run AS Y, Y₁ Short-run AS Quantity of Real Output Suppose the economy is operating in a recession such as point B in the graph. If policymakers allow the economy to adjust to the long-run natural level on its own O a people will reduce their price expectations and aggregate demand will shift right O b. people will reduce their price expectations and the short-run aggregate supply will shift right Opeople will raise their price expectations and the short-run aggregate supply will shift left O d. people will raise their price expectations and aggregate demand will shift left