Figure 11.2 shows the relationship between the price level and real GDP. Suppose the economy is currently at e'. A leftward shift of the short-run aggregate supply curve would return the economy to potential output at:Figure 11.2Potential outputPrice levelLRASSRASP1P2eP3AD'AD*ADRealGDP(trillions ofdollars)a. point e*.b. point e".c. point e.d. a point higher than e".e. a point between e" and e*.

The aggregate demand curve represents the total demand of goods and services in an economy. The…

Figure 11.2 shows the relationship between the price level and real GDP. Suppose the economy is currently at e'. A leftward shift of the short-run aggregate supply curve would returm the economy to potential output at: Figure 11.2 Potential output Price level LRAS SRAS P. P. AD AD AD Real Q. GDP(trillions of dollars) Q. O a. point e*. O b. point e". O c. point e. O d. a point higher than e". O e. a point between e" and e*.

Figure 11.2 shows the relationship between the price level and real GDP. Suppose the economy is currently at e'. A leftward shift of the short-run aggregate supply curve would returm the economy to potential output at: Figure 11.2 Potential output Price level LRAS SRAS P. P. AD AD AD Real Q. GDP(trillions of dollars) Q. O a. point e. O b. point e". O c. point e. O d. a point higher than e". O e. a point between e" and e.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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How would I do c and d?
With the passage of time, which of the following will help direct this economy in Figure 10-21 toward its potential long-run rate of output (e1 to E2)? Figure 10-21 Price Level ti LRAS E₂ SRAS, SRAS: AD₂ AD₁ Y, Y₁ Goods and Services (Real GDP) Output is initially less than long-run capacity O lower interest rates that will stimulate AD and lower resource prices that will increase SRAS O higher interest rates that will reduce aggregate demand and higher resource prices that will reduce SRAS lower interest rates and higher resource prices, both of which will stimulate aggregate demand O higher interest rates that will reduce SRAS and lower resource prices that will stimulate aggregate demand
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Figure 6 PRICE LEVEL LRAS Y, Y₂ QUANTITY OF OUTPUT SRAS; SRAS, AD 15. Refer to Figure 6. Starting from point A and assuming that aggregate demand is held constant, in the long run the economy is likely to experience a a. falling price level and a falling level of output, as the economy moves to point C. b. rising price level and a falling level of output, as the economy moves to point B. c. falling price level and a rising level of output, as the economy moves to point B. d. rising price level and a rising level of output, as the economy moves to point C.
Figure 17.png » Q Price Level LRAS SRAS, SRAS, AD1 load AD2 Real GDP Refer to Figure 17. If the economy starts at A, a lower real interest te moves the economy from A to: B in the short run and the long run. B in the short run and C in the long run. B in the short run and A in the long run. D in the short run and A in the long run. •D in the short run and C in the long run.
Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point W. The price level is Po. Now, suppose there is an exogenous fall in the price level to P2. Which of the following statements describes the likely macroeconomic effects? O A. The AE curve shifts to AE₁, a new equilibrium is established at point V, and the AD curve shifts from AD to AD¹, and equilibrium moves from point B to point D. OB. The AE curve shifts to AE2, a new equilibrium is established at point U, and the AD curve shifts from AD to AD¹, and equilibrium from point B to point D. Ⓒ C. The AE curve shifts to AE2, a new equilibrium is established at point U, and the economy moves from point B to point C along AD. O D. The AE curve shifts to AE₁, new equilibrium is established at point V, and the economy moves from point B to point C along AD⁰. Desired Aggregate Expenditure Price Level 759² Y₁ W Yo Y₂ Real GDP AE=Y AE₂ Real GDP AEo AE₁ Q ✔ Q
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Suppose the price of crude oil increases and we produce just enough crude oil for our own consumption. Increasing the interest rate will the existing recessionary gap. If the central bank does not change the interest rate, will adjust and bring the economy back to Yp. Worsen; wages O b. Improve; wages O c. Improve; tax rates O d. Worsen; tax rates
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The macroeconomy is depicted by the graph to the right 160- a. The current equilibrium price level and output level respectively are: 80 and $ 10 trillion. (Enter your responses as a whole numbers.) LRAS 140- b. The full employment level of GDP is SRAS O A. $10 trillion since the LRAS is defined at this point. 120- O B. unknown since no information was provided about the labor market. 100- O C. $10 trillion now but thereafter it depends on what the aggregate demand curve does. O D. $10 trillion now but it depends on the SRAS curve. 80- 60- AD 40- 10 12 14 16 18 20 Real GDP ($ trillions) Price level