From the list below, choose ONE answer that best describes what would occur INITIALLY in the following AD (aggregate demand) AS (aggregate supply)" situation(s) A large fall in interest rates stimulates capital spending Shift to the right of the AS curve Move to the right (up) along the AS curve Shift to the right of the AD curve Shift to the left of the AS curve Move to the left (down) along the AS curve Move to the right (down) along the AD curve Shift to the left of the AD curve Move to the left (up) along the AD curve

From the list below, choose ONE answer that best describes what would occur INITIALLY in the following AD (aggregate demand) AS (aggregate supply)" situation(s) A large fall in interest rates stimulates capital spending Shift to the right of the AS curve Move to the right (up) along the AS curve Shift to the right of the AD curve Shift to the left of the AS curve Move to the left (down) along the AS curve Move to the right (down) along the AD curve Shift to the left of the AD curve Move to the left (up) along the AD curve

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please let me know if my answer is correct. I am between C and D. If you can please also let me know why the other choices aren't correct
The following graph represents the short-run aggregate supply curve (SRAS) based on an expected price level of 120. The economy's full- employment output level is $9 trillion. Major unions across the country have recently negotiated three-year wage contracts with employers. The wage contracts are based on an expected price level of 120, but the actual price level turns out to be 160. Show the short-run effect of the unexpectedly high price level by dragging the curve or moving the point to the appropriate position. PRICE LEVEL (CPI) 240 200 160 40 0 0 3 SRAS[120] 6 9 12 REAL GDP (Trillions of dollars) 15 18 SRAS[120] 0 (?) Interpret the change you drew on the previous graph by filling in the blanks in the following paragraph:
By using aggregate supply and demand curves to illustrate your points, discuss the impacts of the following events on the price level and on equilibrium GDP (Y) in the short run: a. A tax cut holding government purchases constant with the economy operating at near full capacity b. An increase in the money supply during a period of high unemployment and excess industrial capacity c. An increase in the price of oil caused by a war in the Middle East, assuming that the Central Bank attempts to keep interest rates constant by accommodating inflation d. An increase in taxes and a cut in government spending supported by a cooperative Fed acting to keep output from falling
There are three distinct reasons why the aggregate demand curve slopes downward. List and discuss each reason. The aggregate supply curve can be upward sloping or vertical depending upon the time frame we are considering (short-run or long-run). In what time frame is the aggregate supply curve vertical? Why? In what time frame is the aggregate supply curve upward sloping? Why?
The following events shift either aggregate demand, aggregate supply, both or neither. Using a diagram, illustrate the effect of the events on the economy. In particular, explain the effect of each event on price level, real GDP and equilibrium in the economy. A) A recent business survey reported that business confidence has declined. B) Government cuts the rate of personal income tax after a pandemic caused an economic slowdown. C) A recent flooding in a small rural region destroyed the potato crop. D) A booming economy in a neighbouring country has drawn many working age people (and their families) to emigrate there in search of jobs and better life.
Discuss how the economy returns to equilibrium in response to changes in aggregate demand (AD) and aggregate supply (AS) in both the short run and long run
Need help with this. Please show how to adjust the AS and AD lines. Thanks!
Which of the following would cause a shift in the short run aggregate supply curve? A decrease in interest rates. An increase in price aof key resources like oil. An adjustment in wages or prices by firms An increase in the value of the dollar. A decrease in the price level of the economy. A decrease in the price of key resources like oil. An increase in fechnological innovation.
The following graph shows the aggregate demand curve (AD), the short-run aggregate supply curve (AS), and the long-run aggregate supply curve ( LRAS) for a hypothetical economy. Initially, the expected price level equals the actual price level, and the economy experiences long-run equilibrium at a natural level of output of $100 billion.. Suppose a bout of severe weather drives up agricultural costs, increases the costs of transporting goods and services, and increases the costs of producing goods and services. Use the graph to help you answer the questions about the short-run and long-run effects of the increase in production costs that follow. (Note: You will not be graded on any adjustments made to the graph.) Hint: For simplicity, ignore any possible impact of the severe weather on the natural level of output.
Given the following circumstances, indicate whether or not the aggregate supply curve would shift and, if so, which way would it shift: The price of a barrel of oil doubles An advance in alternative energy technology significantly reduces its cost In order to maintain a relatively clean air quality, a carbon emissions tax is levied against firms with a carbon footprint As a result of fracking, the price of natural gas is significantly reduced Advances in technology increase the productivity of the American worker, on average, by 30%
In 2010, the economy of Quarterville had an aggregate demand and aggregate supply according to the following schedule: Price level Aggregate Demand Short-Run Aggregate Supply Long-Run Aggregate Supply 90 $1505.00 $1205.00 $1465.00 100 $1470.00 $1270.00 $1465.00 110 $1435.00 $1335.00 1 $1465.00 120 $1400.00 $1400.00 $1465.00 130 $1365.00 $1465.00 $1465.00 140 $1330.00 $1530.00 $1465.00 150 $1595.00 $1465.00 $1295.00 What was Quarterville's long-run equilibrium output in 2010? $|
On the following graph, use the purple line (diamond symbol) to plot this economy's long-run aggregate supply (LRAS) curve. Then use the orange line segments (square symbol) to plot the economy's short-run aggregate supply (AS) curve at each of the following price levels: 100, 105, 110, 115, and 120 125 120 115 110 PRICE LEVEL 88 S M 90 AS BO 75 a 10 20 30 42 50 60 70 OUTPUT (Billions of dollars) 60 100 ¢ AS LRAS ? The short-run quantity of output supplied by firms will fall short of the natural level of output when the actual price level, level that people expected. the price