Answered: An increase in wealth from a…

An increase in wealth from a substantial increase in stock prices will move the economy along a fixed aggregate demand curve. O A, true.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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How do fluctuations in aggregate demand and short-run aggregate supply bring fluctuations in real GDP around potential GDP? Starting from a full-employment equilibrium, a decrease in aggregate demand and creates gap. O A. increases real GDP above potential GDP; an inflationary OB. decreases real GDP below potential GDP; an inflationary OC. increases real GDP above potential; a recessionary O D. decreases real GDP below potential GDP; a recessionary _, short-run aggregate , and the economy returns to a full-employment In the long run, the money wage rate supply equilibrium. O A. rises; increases B. falls; decreases C. rises; decreases D. falls; increases
A country's economy is close to full employment. The government then decides to launch a tax cut program. Simultaneously, the central bank launches a bond sale program of the same magnitude. What can we say about the country's aggregate product (Y), price level (P) and interest rate (i) in the short run? We can expect Y to increase, P to increase, and i to increase. O b. We can expect Y to remain unchanged, P to remain unchanged, and i to increase. O c. We can expect Y to remain unchanged, P to remain unchanged, and i to remain unchanged. Od. We can expect Y to decrease, P to decrease, and i to decrease. Oe. None of the alternatives is correct.
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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.
In the AS/AD Model, a decrease in the financial friction will Select one: O a. Shift the aggregate demand curve to the right. Ob. O b. Shift the aggregate supply curve to the left. Shift the aggregate supply curve to the right. O c. O d. Shift the aggregate demand curve to the left.
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In the figure, as the price level increases the aggregate demand curve will Price level (GDP price index, 2012 = 100) A. not shift. O B. not shift, but the aggregate demand curve will change so that it is positively sloped. O C. shift from AD, to AD, O D. shift from AD, to AD, and then back to AD,. E. shift from AD, to AD3. AD2 AD3 AD1 Real GDP (trillions of 2012 dollars)
With the passage of time, which of the following will help direct this economy in Figure 10-21 toward its potential long-run rate of output (e1 to E2)? Figure 10-21 Price Level ti LRAS E₂ SRAS, SRAS: AD₂ AD₁ Y, Y₁ Goods and Services (Real GDP) Output is initially less than long-run capacity O lower interest rates that will stimulate AD and lower resource prices that will increase SRAS O higher interest rates that will reduce aggregate demand and higher resource prices that will reduce SRAS lower interest rates and higher resource prices, both of which will stimulate aggregate demand O higher interest rates that will reduce SRAS and lower resource prices that will stimulate aggregate demand
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