Suppose the government reduces the corporate income tax rate. This will increase the return to firms for investing, which should investment and cause in capital in the long run. Show the long-run effect of this reduction in corporate tax rates on long-run aggregate supply. 1.) Use the line drawing tool to show the effect on long-run aggregate supply. Properly label this lino, 2.) Use the point drawing tool to show the new long-run equilibrium on the graph. Label this point "B". Carefully follow the instructions above, and only draw the required objects. The long-run impact of a reduction in corporate tax rates would be OA a decrease in long-run potential output while actually reducing inflation.. OB. an decrease in long-run potential output while creating additional upward movements in prices. OC. an increase in long-run potential output while actually reducing inflation OD. an increase in long-run potential output while creating additional upward movements in prices. Price Level, P LRAS, Real GOP AD₁

Suppose the government reduces the corporate income tax rate. This will increase the return to firms for investing, which should investment and cause in capital in the long run. Show the long-run effect of this reduction in corporate tax rates on long-run aggregate supply. 1.) Use the line drawing tool to show the effect on long-run aggregate supply. Properly label this lino, 2.) Use the point drawing tool to show the new long-run equilibrium on the graph. Label this point "B". Carefully follow the instructions above, and only draw the required objects. The long-run impact of a reduction in corporate tax rates would be OA a decrease in long-run potential output while actually reducing inflation.. OB. an decrease in long-run potential output while creating additional upward movements in prices. OC. an increase in long-run potential output while actually reducing inflation OD. an increase in long-run potential output while creating additional upward movements in prices. Price Level, P LRAS, Real GOP AD₁

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2) Use the table above to answer the following questions.a) What is the value of real GDP and price level at the long run macroeconomic equilibrium?b) What is the value of real GDP and price level at the short run macroeconomic equilibrium?c) Is the short-run macroeconomic equilibrium a full-employment equilibrium, below full-employment equilibrium, or above full-employment equilibrium?d) How will this economy return to its long run equilibrium? Explain using self-correctingmechanism.
✔ 2 Aplia Assignment Ch 20 4. Determinants of aggregate supply The following graph shows a decrease in short-ron aggregate supply (AS) in a hypothetical economy where the currency is the dollar Specifically, the short-un aggregate supply curve shifts to the left from AS, to AS, causing the quantity of output supplied at a price level of 100 to fall from $200 billion to $150 billion K 1 1 **### PRICE LEVEL 200 20 QUANTITY OF OUTPUT 380 400 The following table lists several determinants of short-run aggregate supply. Regulations on the firm Tax rates Input prices Complete the table by selecting the changes in each scenario necessary to decrease short-run aggregate supply Change Necessary to Decrease AS Grade It Now Save & Continue Continue without saving
Refer to the following figure 1. For this economy, if the actual price level exceeds theexpected price level, how much output will the economyproduce in the short-run? A)$17 trillionB)$17.2 trillionC)$16.7 trillionD) Both A and C.2. Given the situation in part (a), this economy wouldexperience A) a recessionary gap of $0.3 trillionB) an expansionary gap of $0.2 trillionC) neither a recessionary gap nor an expansionary gap.D) an expansionary gap of $17.2 trillion. 3. Given the situation in part (a), in this economy (circlethe letter representing the right answer below)A) the actual rate of unemployment would be less than thenatural rate of unemployment.B) the actual rate of unemployment would be above the naturalrate of unemployment.C) the actual rate of unemployment would be equal to thenatural rate of unemployment.D)none of the above.4. In this economy, given the situation in part (a), in thelong-run (circle the letter representing the right answerbelow)A) the nominal wage…
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
Which of the following would cause the Aggregate Supply curve to move from AS to AS2 in the graph below? A) A general increase in energy and labor cost for businesses. B) A general decrease in labor cost for businesses. C) An increase in productivity. D) A federal government increase in spending.
Suppose that the aggregate demand and aggregate supply schedules for a hypothetical economy are as shown in the following table Amount of Price Level Amount of Real GDP (Price Index) Real GDP Demanded, Supplied, Billions Billions $100 300 $450 200 250 400 300 200 300 400 150 200 500 100 100 a. Use the data above to graph the agregate demand and aggregate supply curves. What are the…
3) Assume initially an economy is at its long run equilibrium. Then, consumerconfidence in this economy increases. What will happen to real GDP and aggregate price level inthe short run equilibrium following the increase in consumer confidence? Use the AggregateDemand – Aggregate Supply model to answer the question.
Starting at long run equilibrium, ceteris paribus, an increase in the costs of widely used factors of production would most likely O Increase short run aggregate supply and create an inflationary gap. O Decrease long run aggregate supply and create a recessionary gap. O Decrease short run aggregate supply and create a recessionary gap. O Decrease aggregate demand and create a recessionary gap.