Question 32Assume the economy is in short-run macro-equilibrium at E1. If the economy isallowed to self-correct on its own then:Price LevelLRASSRASElP1ADReal GDPY1 YpDa the aggregate demand curve shifts right, leading to demand-pull inflation andgrowth in the economyb) the short-run aggregate supply curve shifts left, leading to cost-push inflationand a decrease in real GDPOg the short-run aggregate supply curve shifts right, leading to deflation and anincrease in real GDPO d) the aggregate demand curve shifts left, leading to deflation and a decrease inreal GDP

The economies tend to operate with the motive of maximizing the level of their economic growth and…

Question 32 Assume the economy is in short-run macro-equilibrium at E1. If the economy is allowed to self-correct on its own then: Price Level LRAS SRAS P1 AD Real GDP Y1 Yp O al the aggregate demand curve shifts right, Ieading to demand-pull intlation and growth in the economy O bi the short-run aggregate supply curve shifts left, leading to cost-push inflation and a decrease in real GDP Og the short run aggregate supply curve shifts right, Ieading to deflation and an increase in real GDP the aggregate demand curve shifts left, leading to deflation and a decrease in real GDP

Question 32 Assume the economy is in short-run macro-equilibrium at E1. If the economy is allowed to self-correct on its own then: Price Level LRAS SRAS P1 AD Real GDP Y1 Yp O al the aggregate demand curve shifts right, Ieading to demand-pull intlation and growth in the economy O bi the short-run aggregate supply curve shifts left, leading to cost-push inflation and a decrease in real GDP Og the short run aggregate supply curve shifts right, Ieading to deflation and an increase in real GDP the aggregate demand curve shifts left, leading to deflation and a decrease in real GDP

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following statements about the economy's aggregate demand curve is not correct? O The intersection of the AD curve and the SAS curve determines the short-run Macroeconomic equilibrium. All points on the AD curve relate a particular price level to the total demand for output at that price level. OA change in the price level will shift the AD curve. O The AD curve will be shifted by AD shocks.
Level Yu YI Real NalionalKeme 7. Referring to the above diagram, which of the following is a true statement? A. Macroeconomic policy will be needed to address rising inflation. B. There is sufficient aggregate demand to cause inflationary pressures. C. The equilibrium in the economy is at a lovel of output above full employment. D. There is insufficient aggregate demand to reach full employment.
In the self-correcting AD-AS model, the economy’sshort-run equilibrium position is indicatedby the intersection of which two curves?a. Short-run aggregate supply and long-runaggregate supplyb. Short-run aggregate supply and aggregatedemandc. Long-run aggregate supply and aggregatedemandd. Long-run aggregate demand and short-runpersonal consumption expenditures
Illustrate and interpretthe short-run and longrun effects of temporary and permanentsupply shocks
Price Level AS O a b c ASO Real GDP Refer to the figure above. If aggregate supply is AS, and aggregate demand is ADo, then: a surplus of real output of gh would frepresents a price level that would result in a surplus of real output of ac f represents a price level that would result in a shortage of real output of ac f represents a price level that would result in a surplus of real output of a at any price level above g. a shortage of real output would occur occur
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Possitive short run relatioship between the prices level for outpput and reall gdp holding the prices of inputs fexed a- longo-run aggregate supply SRAS curve b- long run aggregate demand SRAS curve c- short eun aggregate supply SRAS curve d- short-run aggregate demand SRAS curve
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