Exhibit: The Aggregate Demand/Aggregate Supply Model 1 Which of the following statements is true?Group of answer choicesThe economy depicted in the figure experiences a recessionary gap = Yp-Y1. The economy depicted in the figure experiences a recessionary gap = Yp-Y2. The economy depicted in the figure experiences a recessionary gap = Y2-Y1. The economy depicted in the figure is in long-run equilibrium but not in short-run equilibrium./bar (Real GDP per year) Price level P3 P₂ P₁ Y₁ I I Y₂ LRAS SRAS AD Real GDP per year

Exhibit: The Aggregate Demand/Aggregate Supply Model 1 Which of the following statements is true?Group of answer choicesThe economy depicted in the figure experiences a recessionary gap = Yp-Y1. The economy depicted in the figure experiences a recessionary gap = Yp-Y2. The economy depicted in the figure experiences a recessionary gap = Y2-Y1. The economy depicted in the figure is in long-run equilibrium but not in short-run equilibrium./bar (Real GDP per year) Price level P3 P₂ P₁ Y₁ I I Y₂ LRAS SRAS AD Real GDP per year

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 1 The aggregate demand curve: is upward sloping because a higher price level is necessary to make production profitable as production costs rise. is downward sloping because production costs decline as real output increases. O shows the amount of expenditures required to induce the production of each possible level of real output. O shows the amount of real output that will be purchased at each possible price level. O shows the various amounts of real output that businesses will produce at each price level.
R The model of aggregate demand/aggregate supply... O Identifies the equilibrium GDP and price level as well as the gap between the equilibrium GDP and the potential GDP Identifies the potential GDP and price level as well as the gap between the price level and the inflation. O Identifies the equilibrium GDP the economy will reach in the long A run O Identifies the equilibrium quantity and price for consumer goods 10 % 5 T 6 O Y Com liji fa 887 & 7 7 U 8 4 f10 num lk. 8 ( 5 9 開
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Question 24 Information: LRAS SRASI SRAS2 P1 P2 P3 AD Question: Starting from point B and assuming that aggregate demand is held constant, in the long run the economy is likely to experience O a rising price level and a falling level of output. O a falling price level and a falling level of output. O a rising price level and a rising level of output. O a falling price level and a rising level of output.
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28. Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo, and AD1 and AS1 represent changes, which of the above graphs depict the economy's self-correcting mechanism at work? a) Figures A & B b) Figures A & C c) Figures C & D d) Figures B & D
Instructions: Enter your responses as a whole number. Identify the macro equilibrium. Instructions: Use the tool provided 'QE' to identify the current macro equilibrium on the graph. The current macro equilibrium is when real GDP is $ billion. Suppose that full - employment GDP is $12 billion. The real GDP gap is $ billion. Aggregate demand must shift (left or right) by $ billion to achieve the full - employment equilibrium.Real GDP (in billions of dollars per year)
Attached: figure 1: Hayek’s (Classical) AD-AS Model Question 1 Why does Hayek’s aggregate supply curve always lead to an equilibrium level of national output equal to the full-employment level of real GDP? Question 2 Hayek says that markets will heal themselves and that government should not intervene. How does the AD-AS model reflect Hayek’s idea that governments cannot increase real GDP beyond the level that the free market economy is able to produce? Question 3 Do you believe that the Hayek’s classical AD-AS model explain the factors that cause changes (shifts) in AS realistically? Why or why not?
✔ 2 Aplia Assignment Ch 20 4. Determinants of aggregate supply The following graph shows a decrease in short-ron aggregate supply (AS) in a hypothetical economy where the currency is the dollar Specifically, the short-un aggregate supply curve shifts to the left from AS, to AS, causing the quantity of output supplied at a price level of 100 to fall from $200 billion to $150 billion K 1 1 **### PRICE LEVEL 200 20 QUANTITY OF OUTPUT 380 400 The following table lists several determinants of short-run aggregate supply. Regulations on the firm Tax rates Input prices Complete the table by selecting the changes in each scenario necessary to decrease short-run aggregate supply Change Necessary to Decrease AS Grade It Now Save & Continue Continue without saving
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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