Figure: Inflationary and Recessionary Gaps Price level Price level SRAS P₂ *** P₁ AD P₂ Panel (a) P₁ LRAS Panel (b) Real GDP LRAS Y Y₁ Real GDP SRAS AD Refer to Figure: Inflationary and Recessionary Gaps. If the economy is in short-run equilibrium at Y, in panel (a), the economy is in: full employment. a recessionary gap. an inflationary gap. O simultaneous short-run and long-run equilibrium.

Figure: Inflationary and Recessionary Gaps Price level Price level SRAS P₂ *** P₁ AD P₂ Panel (a) P₁ LRAS Panel (b) Real GDP LRAS Y Y₁ Real GDP SRAS AD Refer to Figure: Inflationary and Recessionary Gaps. If the economy is in short-run equilibrium at Y, in panel (a), the economy is in: full employment. a recessionary gap. an inflationary gap. O simultaneous short-run and long-run equilibrium.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A(I) and (ii) pls!
An increase in taxes when the economy is above full employment OA. increases; falls B. increases; rises O C. does not change; does not change O D. decreases; falls aggregate demand and real GDP, and the price level
Price level (GDP price Index 2012-100) Pocential AS 130 GDP 120 110 100 90 AD 19.0 195 20.0 20.5 21.0 21.5 Real GDP (trillons of 2012 dollars) In the figure above, the economy is at an equilibrium with real GDP of $20 trillion and a price level of 110. As the economy moves toward its ultimate equilibrium, the curve shifts because O a. aggregate supply; leftward; the money wage rate rises O b. aggregate supply; rightward; the money wage rate falls O c. aggregate demand; leftward; the money wage rate rises d. potential GDP; leftward; the money wage rate falls O e. aggregate demand; rightward; the money wage rate falls
Read Eye on Booms and Busts. Explain why the NBER reported that the 2008 recession began before real GDP had fallen for two successive quarters. The NBER Committee OA. anticipated the recession was going to happen because real GDP clearly peaked in 2007 OB. based its decision on peaks in the data on real personal income, real manufacturing, wholesale and retail sales, industrial production, and employment, which all peaked between November 2007 and June 2008 OC. made an error because a recession cannot occur unless real GDP falls for two successive quarters O D. saw that the business cycle trough occurred in the second quarter of 2009, so it was obvious that the recession began in 2008
Suppose that the economy is depicted in the graph to the right. a. The equilibrium price level and real GDP in this economy are respectively OA. 80, $10 trillion. OB. $80; $10 trillion. OC. 80 trillion; 10. OD. $80 trillion; $10 trillion. b. Using the line drawing tool, show a change in aggregate demand that leads to an inflationary gap. Label this new line 'AD₁'. Carefully follow the instructions above, and only draw the required objects. to search
Price level (GDP priceindex) Real GDP demanded Real GDP supplied (trillions of 2005 yen) 75 600 400 105 450 550 135 300 700 The short-run macroeconomic equilibrium real GDP is ¥------ trillion and the equilibrium price level is ------. The size of the (recessionary , or inflamatory) gap is ¥-------- trillion.
The figure to the right shows an economy in a short-run equilibrium at point A Using the three-point curved line drawing tool, illustrate cost-push inflation. Properly label this curve Note: Carefully follow the instructions above and only draw the required object. Which of the following is most likely to cause the cost shock that shifts the AS curve consistent with cost-push inflation? A. A surge in the price of crude oil. OB. A tax increase on households. OC. An increase in the size of government. OD. A flood of new immigrants. Price level, Pa AD₂ Yo Aggregate output (income), Y AS du
4
87
x ions < Price Level (average price) PE P AD, e 5.2 AD₂ 5.6 AD₁ 6.0 a AS Real Output (trillions of dollars per year) Assume aggregate demand is represented by AD1 and full employment is $5.6 trillion. The equilibrium level of income is: A) $800 billion. B) $5.2 trillion. C) $5.6 trillion. D) $6.0 trillion.
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.
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.