QUESTION 5 a. Suppose that some kind of significant economic event has occurred, and y ou learn that the event will definitely cause the aggregate price level to decrease, but that its effect on short-run equilibrium real GDP cannot be determined without knowing the exact magnitude of its effects on Aggregate Supply and Aggregate Demand. Based on this information, do you think that this economic event shifted the Aggregate Demand curve, the Aggregate Supply curve, neither curve, or both curves? And if you think either or both of the curves shifted, indicate in which direction you think they must have shifted. b. The table below describes four sets of economic events. For each event, indicate whether it will shift the AD curve and/or the AS curve to the right (by entering "R"), to the left (by entering "L"), or not at all (by leaving it blank) AD S-R AS Events Shift Shift The government decreases unemployment insurance benefits The Federal Reserve decreases the money supply, and oil prices rise sharply A new technology greatly increases productivity A stock market boom increases household wealth, and then nominal wages increase

QUESTION 5 a. Suppose that some kind of significant economic event has occurred, and y ou learn that the event will definitely cause the aggregate price level to decrease, but that its effect on short-run equilibrium real GDP cannot be determined without knowing the exact magnitude of its effects on Aggregate Supply and Aggregate Demand. Based on this information, do you think that this economic event shifted the Aggregate Demand curve, the Aggregate Supply curve, neither curve, or both curves? And if you think either or both of the curves shifted, indicate in which direction you think they must have shifted. b. The table below describes four sets of economic events. For each event, indicate whether it will shift the AD curve and/or the AS curve to the right (by entering "R"), to the left (by entering "L"), or not at all (by leaving it blank) AD S-R AS Events Shift Shift The government decreases unemployment insurance benefits The Federal Reserve decreases the money supply, and oil prices rise sharply A new technology greatly increases productivity A stock market boom increases household wealth, and then nominal wages increase

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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es/118790/quizzes/952344/take OS D SU My ASU ASU CANVAS Question 2 Which of the following would cause a shift in the short-run aggregate supply curve, but no change in the long-run aggregate supply curve? O an increase in the size of the labor force an increase in the wage rate an increase in the quantity of capital O all of the above would shiftboththe long-run aggregate supply curve and the short-run aggregate supply curve. Question 3 Which of the following would NOT lead to a shift in the long- run aggregate supply curve? O An increase in the money supply. 1
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