Describe three types of short-run macroeconomic equilibrium. A macroeconomic equilibrium in which real GDP equals potential GDP is And one in which real GDP exceeds potential GDP is equilibrium A. a full-employment; an above full-employment OB. an above full-employment, a full-employment OC. an above full-employment, an inflationary OD. a full-employment, a recessionary equilibrium The graph shows an economy's long-run aggregate supply curve. The economy is at a below full-employment equilibrium. Draw an aggregate demand curve and a short-run aggregate supply curve. Label them. Draw a point at the short-run equilibrium. 150- 140 130- 120+ 110 100- 90+ Price level (GDP deflator, 2007-100) LAS 1.5 1.8 1.6 1.7 Real GDP (trillions of 2007 dollars) >>> Draw only the objects specified in the question. Q Q G 1.9 20 21

Describe three types of short-run macroeconomic equilibrium. A macroeconomic equilibrium in which real GDP equals potential GDP is And one in which real GDP exceeds potential GDP is equilibrium A. a full-employment; an above full-employment OB. an above full-employment, a full-employment OC. an above full-employment, an inflationary OD. a full-employment, a recessionary equilibrium The graph shows an economy's long-run aggregate supply curve. The economy is at a below full-employment equilibrium. Draw an aggregate demand curve and a short-run aggregate supply curve. Label them. Draw a point at the short-run equilibrium. 150- 140 130- 120+ 110 100- 90+ Price level (GDP deflator, 2007-100) LAS 1.5 1.8 1.6 1.7 Real GDP (trillions of 2007 dollars) >>> Draw only the objects specified in the question. Q Q G 1.9 20 21

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Figure 34-3 PRICE LEVEL a a a LRAS Y, Y₂ QUANTITY OF OUTPUT SRAS. SRAS. AD Refer to Figure 34-3. Starting from point B and assuming that aggregate demand is held constant, in the long run the economy is likely to experience a falling price level and a falling level of output, as the economy moves to point C. falling price level and a rising level of output, as the economy moves to point A. rising price level and a falling level of output, as the economy moves to point A. Orising price level and a rising level of output, as the economy moves to point C.
Refer to the following figure 1. For this economy, if the actual price level exceeds theexpected price level, how much output will the economyproduce in the short-run? A)$17 trillionB)$17.2 trillionC)$16.7 trillionD) Both A and C.2. Given the situation in part (a), this economy wouldexperience A) a recessionary gap of $0.3 trillionB) an expansionary gap of $0.2 trillionC) neither a recessionary gap nor an expansionary gap.D) an expansionary gap of $17.2 trillion. 3. Given the situation in part (a), in this economy (circlethe letter representing the right answer below)A) the actual rate of unemployment would be less than thenatural rate of unemployment.B) the actual rate of unemployment would be above the naturalrate of unemployment.C) the actual rate of unemployment would be equal to thenatural rate of unemployment.D)none of the above.4. In this economy, given the situation in part (a), in thelong-run (circle the letter representing the right answerbelow)A) the nominal wage…
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At the macroeconomic equilibrium, the economy has _______ gap, so to return to full employment _________. A. an inflationary; the money wage rate rises and aggregate supply increases B. a recessionary; the money wage rate falls and aggregate supply increases C. an inflationary; the money wage rate rises and aggregate supply decreases D. a recessionary; the money wage rate rises and aggregate supply decreases
tion 6 According to aggregate supply and aggregate demand analysis, what happens to P (price level) and Q (GDP) if X increases? Oa. Prices decrease and GDP decreases. O b. Prices increase and GDP decreases. Oc Prices stay the same and so does GDP i AS and AD curves shift by the same amount O d. Prices increase and GDP increases. estion will save this response.
When households cut back on their spending, then in the short run we tend to see the price level ______ and equilibrium output __________. fall; fall rise; fall rise; rise fall; rise
When the macroeconomic equilibrium is such that real GDP is less than potential real GDP, the economy is suffering from and the government policy to eliminate this gap will the price level. real GDP and to A. an inflationary gap; increase; decrease a recessionary gap; decrease; decrease OC. a recessionary gap; decrease; increase B. D. an inflationary gap; decrease; increase OE. a recessionary gap; increase; increase
In the intermediate range of an aggregate supply curve an increase in total demand will O cause unemployment and deflation. cause employment to fall, but the price level to rise. increase employment, output, and the price level. O increase employment and output but not the price level.
K Consider the following diagram, in which the current short-run equilibrium is at point A. a. At point A, the economy has an inflationary gap b. If the marginal propensity to consume equals 0.5, to eliminate the gap, the government should decrease spending by $trillion. (Round your answer to two decimal places.) Price Level 122 118 114 LRAS SRAS A 22 22.8 23.6 Real GDP per Year ($ trillion) AD
Starting at long run equilibrium, ceteris paribus, an increase in the costs of widely used factors of production would most likely O Increase short run aggregate supply and create an inflationary gap. O Decrease long run aggregate supply and create a recessionary gap. O Decrease short run aggregate supply and create a recessionary gap. O Decrease aggregate demand and create a recessionary gap.