How, if at all, did these events affect the long-run aggregate supply (LRAS) curve? Note that some events may be unplaced Shifted the LRAS curve to the left Shifted the LRAS curve to the right Answer Bank the 1970s oil crisis a central bank increasing the amount of money in circulation James Watt's invention of the steam engine in 1775 the Internet revolution of the 1990s a tsunami destroying much of the existing stock of capital in Japan significant and sustained increases in income tax rates

How, if at all, did these events affect the long-run aggregate supply (LRAS) curve? Note that some events may be unplaced Shifted the LRAS curve to the left Shifted the LRAS curve to the right Answer Bank the 1970s oil crisis a central bank increasing the amount of money in circulation James Watt's invention of the steam engine in 1775 the Internet revolution of the 1990s a tsunami destroying much of the existing stock of capital in Japan significant and sustained increases in income tax rates

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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 0 O U 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 March 2009 to 2013, the U.S. stock market more than doubled in value. How might this have affected aggregate demand? What happens to aggregate demand when the stock market plunges?
The following graph shows the economy in long-run equilibrium at the expected price level of 120 and the natural level of output of $600 billion. Suppose a stock market boom increases household wealth and causes consumers to spend more. Shift the short-run aggregate supply (AS) curve or the aggregate demand (AD) curve to show the short-run impact of the stock market boom. 240 AS 200 AD 160 AS 120 80 AD 40 200 400 600 800 1000 1200 OUTPUT (Billions of dollars) In the short run, the increase in consumption spending associated with the stock market expansion causes the price level to the price level people expected and the quantity of output to the natural level of output. The stock market boom will cause the unemployment rate to the natural rate of unemployment in the short run. Again, the following graph shows the economy in long-run equilibrium at the expected price level of 120 and the natural level of output of $600 billion, before the increase in consumption spending associated with…
The graph below shows the AD-AS diagram for Spain. All numbers are in billions. 1. What is the size of real GDP in the short-run equilibrium? answer "a". 2. What is the price level in the short-run equilibrium? answer "b". 3. What is the level of Potential GDP in Spain? answer "c".
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.
How does the increase in U.S energy production and the subsequent reduction in the reliance on imported oil affect the U.S Aggregate demand and/or short run aggregate supply curve(s) ? Examine the potential impact on real GDP and the average price level in the U.S.
In the year 2023, aggregate demand and aggregate supply in the fictional country of Gurder are represented by the curves AD2023 and AS on the following graph. Suppose the natural level of output in this economy is $10 trillion. On the following graph, use the green line (triangle symbol) to plot the long-run aggregate supply (LRAS) curve for this economy. PRICE LEVEL 108 107 106 105 104 103 102 101 100 0 2 AD 2023 B I A 4 6 8 10 OUTPUT (Trillions of dollars) 12 AS ADB 14 AD А 16 A LRAS Outcome C (?)
Q9
The graph below shows the long-run aggregate supply (LRAS), the short-run aggregate supply (SRAS), and aggregate demand (AD) curves for a given economy. Manipulate the curves to show the long run effect of an increase in money supply. In the long run, an increase in the money supply will result in the following.
Which of the following would cause a leftward shift of the aggregate demand curve? a decrease in tax rates an expectation of higher national income the economy of a trading partner enjoys a high rate of economic growth an appreciation of the U.S. dollar O a decrease in interest rates
In the second half of 2021, Congress passed and President Biden signed into law a $1 trillion infrastructure bill. This bill increases spending to improve roads, bridges, communication systems (broadband access), clean drinking water, and similar structures across the nation. Use the short-run aggregate supply – aggregate demand model to graph and explain how the spending in this bill will likely impact the U.S. economy.
From the list below, match the letter of the outcome each of the following events produces upon the AD curve. Type in a single letter (A, B, C or D). Deflation has occurred during the past year. Real GDP levels of all the nation's major trading partners have declined. There has been a decline in the foreign exchange value of the nation's currency. The price level has increased this year. ☐☐☐☐ A Shifts to right B Shifts to left C Movement up along D Movement down along