Consider the following graph. Suppose the economy is currently at point A. Suppose there is a temporary decrease in the prices of raw materials. (Raw materials are used for production.) The economy will go to point, in short run, and then point. in long run. Price level OC;B OB;A OB; C OCA ODA Question 2 LRAS O vertical straight; increase by 10 percent O upward sloping: decrease by 10 percent O vertical straight; remain unchanged SRAS₁ O downward sloping increase by 10 percent O downward sloping: decrease by 10 percent SRAS AD LRAS is a(n) line. If the price level drops by 10 percent, then all else being equal, the long- run quantity of aggregate supply will Real GDP (Y)

Consider the following graph. Suppose the economy is currently at point A. Suppose there is a temporary decrease in the prices of raw materials. (Raw materials are used for production.) The economy will go to point, in short run, and then point. in long run. Price level OC;B OB;A OB; C OCA ODA Question 2 LRAS O vertical straight; increase by 10 percent O upward sloping: decrease by 10 percent O vertical straight; remain unchanged SRAS₁ O downward sloping increase by 10 percent O downward sloping: decrease by 10 percent SRAS AD LRAS is a(n) line. If the price level drops by 10 percent, then all else being equal, the long- run quantity of aggregate supply will Real GDP (Y)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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)
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50 45 ↑ases 40 35 30 25 20 15 10 5. 30 20 30 40 50 60 70 80 Refer to Figure 2-4. It is possible for this economy to produce 40 toothbrushes and 20 toasters. O 50 toothbrushes and 30 toasters. O 70 toothbrushes and 40 toasters. O All of the above.
2
The figure shows the circular flows in the market economy. Indicate the real and money flows in which the following items belong. When Apple Inc. pays the designers of the iPad, the flows are a to households and a from households to firms. O A. real flow; real flow B. money flow, money flow OC. money flow, real flow O D. real flow; money flow When you buy a new e-book from Amazon, the flows are a households to firms and a from firms to households. O A. money flow, real flow O B. real flow; money flow OC. money flow, money flow OD. real flow; real flow from firms from ( Labour, land, capital, entrepreneurship FACTOR MARKETS HOUSEHOLDS Wages, rent, interest, profits FIRMS Goods and services Expenditure on goods and services GOODS MARKETS
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