4. The slope and position of the long-run aggregate suppcurveAssume the Federal Reserve triples the growth rate of thequantity of money in circulation. In the long run, this increain money growth will affect which of the following? Checkthat apply.Suppose when unemployment is at its natural rate theeconomy produces a level of real GDP equal to $60 billion.EUsing the purple points (diamond symbol) plot the economylong-run aggregate supply (LRAS) curve on the graph.132128124120116112108The inflation rate104The level of technological knowledgeThe quantity of physical capitalThe size of the labor force1000+1020 30 40 50 60 70OUTPUT (Billions of dollars)80 90 100LRASSuppose now the government passes a law that significanincreases the minimum wage. This change in policy willcause the natural rate of unemployment to, which will:Oshift the long-run aggregate supply curve to the rightNot impact the long-run aggregate supply curveO Shift the long-run aggregate supply curve to the leftComplete the following table by determining how each evenimpacts the position of the long-run aggregate supply (LRAS Using the purple points (diamond symbol) plot the economlong-run aggregate supply (LRAS) curve on the graph.?PRICE LEVEL132128124120116112108104100010 2030 40 50 60 70OUTPUT (Billions of dollars)8090 100Suppose now the government passes a law that significaincreases the minimum wage. This change in policy willcause the natural rate of unemployment to, which will:O Shift the long-run aggregate supply curve to the rightNot impact the long-run aggregate supply curveO Shift the long-run aggregate supply curve to the leftLRASComplete the following table by determining how each everimpacts the position of the long-run aggregate supply (LRAcurve.An investment tax credit increases the rate at which firms acquire machinery and equipment.The government allows more immigration of working-age adults who find work.For environmental and safety reasons, the government requires that the country's nuclear power plantsbe permanently shut down.Direction of LRAS Curve Shift3

The long-run aggregate supply (LRAS) curve represents the relationship between the price level and…

Assume the Federal Reserve triples the growth rate of the quantity of money in circulation. In the long run, this increa in money growth will affect which of the following? Check that apply. 132 Suppose when unemployment is at its natural rate the economy produces a level of real GDP equal to $60 billion. 128 Using the purple points (diamond symbol) plot the economy long-run aggregate supply (LRAS) curve on the graph. 124 120 116 112 108 The inflation rate 104 The level of technological knowledge The quantity of physical capital 100 The size of the labor force 0 10 20 30 40 50 60 70 80 90 100 OUTPUT (Billions of dollars) Suppose now the government passes a law that significan increases the minimum wage. This change in policy will cause the natural rate of unemployment to ich wi Shift the long-run aggregate supply curve to the right LRAS Not impact the long-run aggregate supply curve Oshift the long-run aggregate supply curve to the left

Assume the Federal Reserve triples the growth rate of the quantity of money in circulation. In the long run, this increa in money growth will affect which of the following? Check that apply. 132 Suppose when unemployment is at its natural rate the economy produces a level of real GDP equal to $60 billion. 128 Using the purple points (diamond symbol) plot the economy long-run aggregate supply (LRAS) curve on the graph. 124 120 116 112 108 The inflation rate 104 The level of technological knowledge The quantity of physical capital 100 The size of the labor force 0 10 20 30 40 50 60 70 80 90 100 OUTPUT (Billions of dollars) Suppose now the government passes a law that significan increases the minimum wage. This change in policy will cause the natural rate of unemployment to ich wi Shift the long-run aggregate supply curve to the right LRAS Not impact the long-run aggregate supply curve Oshift the long-run aggregate supply curve to the left

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Changing course, Australia raises interest rate Inflation rate (percent per year) LRPC The Reserve Bank of Australia (the central bank) raised its overnight rate (equivalent to the U.S. federal funds rate) by a quarter of a percentage point, to 3.25 percent a year, amid concerns about rising inflation. The interest rate rise came earlier than many economists had expected. 5- Source: New York Times, October 6, 2009 4- If with the Reserve Bank's "concerns about rising inflation," people increase the expected inflation rate, explain how the short-run tradeoff will change. 3- 2- The figure shows Australia's short-run Phillips curve and the long-run Phillips curve. 1- SRPC If the natural unemployment rate remains at 5 percent, show the effect of the rise in the expected inflation rate in the graph. 0- 6 8. Draw either a new SRPC curve (SRPC,) or an arrow along the SRPC curve Unemployment rate (percent of labor force) showing the direction of change. >>> Draw only the objects specified in…
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5. Velocity and the quantity equation Consider a simple economy that produces only streaming devices. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2021, the money supply was $240, the price of a streaming device was $10.00, and the economy produced 600 streaming devices. Fill in the missing values in the following table, selecting the answers closest to the values you calculate. Year Quantity of Money Velocity of Money Price Level Quantity of Output Nominal GDP (Dollars) (Dollars) (Streaming devices) (Dollars) 2021 240 10.00 600 2022 252 25 600 The money supply grew at a rate of from 2021 to 2022. Since streaming device output did not change from 2021 to 2022 and the velocity of money, the change in the money supply was reflected in changes in the price level. The inflation rate from 2021 to 2022 was
2. The Phillips curve in the short run and long run The following graph plots aggregate demand (AD) and aggregate supply (AS) for the imaginary country of Iguazu in the year 2027. Suppose the natural level of output in this economy is $7 trillion. On the following graph, use the green line (triangle symbol) to plot the long-run aggregate supply (LRAS) curve for this economy. PRICE LEVEL 108 107 LRAS AS 108 105 104 103 102 101 A AD AD 100 2 4 10 12 14 16 OUTPUT (Trillions of dollars) Outcome C Economists forecast that if the government takes no action and the economy continues to grow at the current rate, aggregate demand in 2028 will be given by the curve labeled ADA, resulting in the outcome given by point A. If, however, the government pursues an expansionary policy, aggregate demand in 2028 will be given by the curve labeled ADB, resulting in the outcome given by point B. The following table presents projections for the unemployment rates that would occur at point A and point B.…
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5. The slope and position of the long-run aggregate supply curve Suppose the Fed doubles the growth rate of the quantity of money in the economy. In the long run, the increase in money growth will change which of the following? Check all that apply. n The level of technological knowledge n The quantity of physical capital The inflation rate n The size of the labor force Suppose the economy produces real GDP of $50 billion when unemployment is at its natural rate. Use the purple points (diamond symbol) to plot the economy's long-run aggregate supply (LRAS) curve on the graph. 132 128 LRAS 124 120 116 112 108 104 100 10 20 30 40 50 60 70 80 OUTPUT (Billions of dollars) Suppose the government passes a law that significantly increases the minimum wage. The policy will cause the natural rate of unemployment to which will: o Not affect 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 In the…
K Suppose in 2018, the United Kingdom economy was at full employment Nominal GDP was £2,730 billion, the real interest rate was 3 percent per year, the inflation rate was 3 percent a year, and the price level was 130 Calculate the nominal interest rate In the long run, if the real interest rate remains the same but the inflation rate increases to 6 percent a year, how does the nominal interest rate change? The nominal interest rate is percent a year In the long run, if the real interest rate remains the same but the inflation rate increases to 6 percent a year, then the nominal interest rate perce
Question Suppose the Fed tries to prevent the increased government demand for loanable funds from raising interest rates by increasing the supply of loanable funds through and expansion of commercial bank loans. Will this Fed policy succeed in preventing interest rates from rising? At what point will the Fed's expansionary policy step up the inflation rate? How will the expectation of a higher rate of inflation cause interest rates to rise?
Suppose the Fed doubles the growth rate of the quantity of money in the economy. In the long run, the increase in money growth will change which of the following? Check all that apply. O The size of the labor force O The level of technological knowledge The price level The inflation rate Suppose the economy produces real GDP of $40 billion when unemployment is at its natural rate. Use the purple points (diamond symbol) to plot the economy's long-run aggregate supply (LRAS) curve on the graph. 132 128 LRAS 124 120 116 Q112 + PRICE LEVEL