In the short run, policy that changes aggregate demand changes Answer both unemployment and the price level. neither unemployment nor the price level. only unemployment. only the price level.

Q: As a result of the change in real GDP, will an increase in the interest rate on bank loans lead to…

A: The increase in the real GDP and the increase in the interest rate are two different factors. When…

Q: equilibrium. IT e is a nevW economy is computer chip introduced which is 5x faster and 10x cheaper…

A: When the aggregate amount of output demanded equals the aggregate amount of output supplied, an…

Q: Refer to the diagram. Assume that nominal wages initially are set based on the price level P2 and…

A: Aggregate supply refers to the total quantity of goods and services that producers in an economy are…

Q: The CPI in Mexico has been increasing consistently recently.  A change in expectations that reflects…

A: Consumer price index (CPI) refers to the measurement of weighted average price of the consumption of…

Q: True or false The aggregate supply curve is vertical in the long run at the full-employment level…

A: According to the given question Answer is TRUE

Q: Assume that the economy is in a full employment equilibrium. There is an increase in consumer…

A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…

Q: The aggregate supply curve for the long run is: Group of answer choices Represents potential output,…

A: Long-run:- The term "long-run" refers to the amount of time it takes for nominal wages and other…

Q: In the short run, the quantity of output that firms supply can deviate from the natural level of…

A: The sticky wage theory contends that changes in business performance or the status of the economy…

Q: Suppose advances in computer technology lead to a surge in worker productivity. In the long run,…

A: Worker productivity, also known as labor productivity, refers to the measure of the efficiency and…

Q: In the long run, the aggregate supply curve: Slopes upward and to the right Slopes downward and to…

A: Aggregate supply refers to the total supply of goods and services in an economy over a given period,…

Q: The aggregate supply curve shows the relationship between real GDP and the average price level. a.…

A: Aggregate Supply  The total output of finished products and services produced by the domestic…

Q: The U.S. state of Maryland banned use of hydraulic fracturing to extract oil and gas in 2017. How…

A: The price level is the average of current prices over the entire spectrum of goods and services…

Q: In a new initiative to promote exercise, the Australian government spends a lot of money building…

A: Here, it is given that the government increases its expenditure  on building and renovating parks to…

Q: If oil prices rose at the same time that the federal government decreases taxes in the short run…

A: Demand: - Demand is the relationship between the quantity demanded and the price of a good. There is…

Q: Assume that the economy is in a full employment equilibrium. There is an improvement in overa…

A: Answer: (A)

Q: A decrease in the price level accompanied by no change in the money wage rate leads to movement…

A: The short-run aggregate supply (SRAS) curve depicts the positive relationship between price and…

Q: When Full employment GDP is less than equilibrium GDP, the economy faces A) Recession B) Inflation…

A: Full employment refers to the economic situation where all the labor resources in the economy are…

Q: A looseningloosening of the labor market will cause A. the aggregate supply curve to shift down. B.…

A: This can be described as a form of labor market that typically means an increase in unemployment and…

Q: Assume that the economy is in a full employment equilibrium. There is an improvement in overall…

A: The economy is said to be at the full-employment level if it's all the factors of production are…

Q: 27. (Figure: Four Markets for DVDs) Which of the graphs shows what may happen if some of the stores…

A: The factors of demand and supply are the elements that determine the interaction between buyers and…

Q: A rise in the price level means a: Group of answer choices lower value of goods lower value of money…

A: The economies tend to focus on their growth, and development, where various parties in the economy…

Q: Members of Congress are interested in increasing the minimum wage from its current rate of $7.25 an…

A: A minimum wage law gives rise to unemployment in the economy as the wage set by the government is…

Q: TRUE OR FALSE   Social welfare indifference curves are useful in discussions about the tradeoffs…

A: An indifference bend shows a blend of two products that give a shopper equivalent fulfillment and…

Q: c) The unemployment rate is the number of Group of answer choices people looking for work divided by…

A: The unemployment rate is the number of (group answer choices):- People looking for work divided by…

Q: In the short run, what is the impact on the price level and the level of the real GDP of each of the…

A: In equilibrium, the supply and demand curves intersect at E and the price level is at P0 and GDP…

Q: If aggregate demand (AD) decreases, then output will increase; return to the previous level remain…

A: The phrase "aggregate demand" refers to the overall demand for capital goods, consumer products, and…

Q: If firms become more optimistic about the future of the economy and, at the same time, innovation in…

A: When the economy as well as the people in the economy becomes optimistic about the future, then they…

Q: The Chinese economy is at full employment when the global economy goes into recession. Explain the…

A: Global recession: It refers to the level of unemployment at the global level. The increase in the…

Q: Which of these does NOT cause shifts in short run aggregate supply (SRAS Nominal wages O Firms'…

A: Short run aggregate supply curve shows a positive relationship between price and output. It slopes…

Q: Which statement is correct? The Census Bureau surveys both businesses and households to measure…

A: Unemployment is the term used for when a person is willing to work in the market at the prevailing…

Q: Some politicians have suggested tying the minimum wage to the consumer price index (CPI). Applying…

A: The minimum wage is the government determined wage rate that the employer in the economy should pay…

Q: The aggregate demand curve shows  at each level of unemployment what is the total demand for goods…

A: The aggregate demand (AD) curve is a graphical representation of the relationship between the…

Q: Which items describe long-run aggregate supply (LRAS), and which ones describe short-run aggregate…

A: LRAS or Long-Run Aggregate Supply:- Reflects the economy's potential output at full employment.-…

Q: Explain how real GDP is determined when the price level is fixed.

A: The measure that depicts the value of goods and services being produced in an economy during a given…

Q: Which of the below is one of the reasons that the Aggregate Demand curve is downward sloping? The…

A: The total demand curve has been prepared under this perception that the government holds the supply…

Q: Which of the following is likely to occur if an increase in legal immigrants significantly reduces…

A: Aggregate supply refers to the total quantity of output that all the firms produce within a given…

Q: c) The unemployment rate is the number of Group of answer choices people looking for work divided by…

A: NOTE: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: An economy is at full employment. Which of the following can create an inflationary gap. Group of…

A: An inflationary gap exists when the demand for goods and services exceeds production due to factors…

Q: The higher-than-expected price level causes firms to earn profit than they expected on each unit of…

A: The monetary value of all the goods and services that a country can create in a specific period of…

Q: c) The unemployment rate is the number of Group of answer choices people looking for work divided by…

A: Unemployed refers to those people who are currently not working but are actively looking for a job.…

Q: Which only affects short run aggregate supply? Choose all that apply. Group of answer choices…

A: The aggregate supply refers to the total supply of all finished commodities produced in an economy…

Q: What is Phillips curve? Draw the short-run Phillips curve and the long-run Phillips curve. Explain…

A: a. A Phillips curve is a curve showing the short run tradeoff between inflation and unemployment.

Q: If Country X is currently at full employment. A fall in future profit will reduce SAS and hence…

A: Full employment in macroeconomic theory is a situation in which everyone who is willing and able to…

Q: Refer to the graph shown. During the Reagan Administration (1981 to 1989), tax rates were reduced…

A: Reduction in taxes while spending on defence increases which shows government spending increasing.…

Q: Is the equilibrium at full employment, inflation or recession? Price level Aggregate Demand…

A: The objective of the question is to determine the state of the economy - whether it is in a state of…

Q: Illustrate general equilibrium and the Laffer curve in the context of a repre- sentative consumer…

A: Utility function: