on Indicate whether the following factor will affect aggregate demand (AD) or aggregate supply (AS) and whether the effect would be an increase or a decrease. Then indicate what will happen to the price level and the level of Real GDP and what type of equilibrium will result assuming that the economy is initially in long-run equilibrium. a) A decrease in the nominal wage rate. b) A decrease in exports. c) A decrease in the exchange rate. d) The discovery of vast new oil field in AD no effect decrease + increase no effect AS increase no effect increase increase <<«> decrease decrease decrease <> Real GDP increase decrease increase increase Equilibrium recessionary gap ⇒ inflationary gap inflationary gap inflationary gap AP ? Q Fir
on Indicate whether the following factor will affect aggregate demand (AD) or aggregate supply (AS) and whether the effect would be an increase or a decrease. Then indicate what will happen to the price level and the level of Real GDP and what type of equilibrium will result assuming that the economy is initially in long-run equilibrium. a) A decrease in the nominal wage rate. b) A decrease in exports. c) A decrease in the exchange rate. d) The discovery of vast new oil field in AD no effect decrease + increase no effect AS increase no effect increase increase <<«> decrease decrease decrease <> Real GDP increase decrease increase increase Equilibrium recessionary gap ⇒ inflationary gap inflationary gap inflationary gap AP ? Q Fir
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:on
Indicate whether the following factor will affect aggregate demand (AD) or aggregate supply
(AS) and whether the effect would be an increase or a decrease. Then indicate what will
happen to the price level and the level of Real GDP and what type of equilibrium will result
assuming that the economy is initially in long-run equilibrium.
a) A
decrease in
the nominal
wage rate.
b) A
decrease in
exports.
c) A
decrease in
the
exchange
rate.
d) The
discovery of
vast new oil
field in
AD
no effect
decrease +
increase
no effect
AS
increase
no effect
increase
increase
<<«>
decrease
decrease
decrease
<>
Real GDP
increase
decrease
increase
increase
Equilibrium
recessionary gap ⇒
inflationary gap
inflationary gap
inflationary gap
AP
?
Q
Fir
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