Expenditures, Income Price level 60 50 40 30 20 10 0 8288780 60 50 40 30 10 0 0 10 20 30 40 50 real GDP=Q 10 20 30 real GDP=Q 1 AS AD Q AE* AEO ADO 40 50 Expenditures, Income Price level 60 50 40 30 20 10 0 0 10 80 0 0 50 40 30 20 10 0 70 60 20 30 40 real GDP=Q AS 50 CAD AE* AEO TADO! 0 10 20 30 40 50 real GDP =Q 16. Which of the following are reasons why the short-run Aggregate Supply curve shown in the right-hand diagrams may be vertical? O (a) The economy at this level of real GDP might be operating beyond the full-employment level. O (b) Inflationary expectations have set-in. So, the owners of resources are acting on these inflationary expectations and insisting on higher resource prices in anticipation of future products price inflation. O (c) Short-run Aggregate Supply in the Classical model is always constant. O (d) All the above O (e) Only (a) and (b) are true. O (f) None of the above.

Expenditures, Income Price level 60 50 40 30 20 10 0 8288780 60 50 40 30 10 0 0 10 20 30 40 50 real GDP=Q 10 20 30 real GDP=Q 1 AS AD Q AE* AEO ADO 40 50 Expenditures, Income Price level 60 50 40 30 20 10 0 0 10 80 0 0 50 40 30 20 10 0 70 60 20 30 40 real GDP=Q AS 50 CAD AE* AEO TADO! 0 10 20 30 40 50 real GDP =Q 16. Which of the following are reasons why the short-run Aggregate Supply curve shown in the right-hand diagrams may be vertical? O (a) The economy at this level of real GDP might be operating beyond the full-employment level. O (b) Inflationary expectations have set-in. So, the owners of resources are acting on these inflationary expectations and insisting on higher resource prices in anticipation of future products price inflation. O (c) Short-run Aggregate Supply in the Classical model is always constant. O (d) All the above O (e) Only (a) and (b) are true. O (f) None of the above.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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