The graph shows an economy's potential GDP and the aggregate supply curve. Draw an arrow that shows a rise in the price level when the money wage rate remains unchanged. Label it 1. Draw an arrow that shows a rise in the price level accompanied by the same percentage rise in the money wage rate and the money prices of other resources. Label it 2. What is the effect of an increase in the price level when the money wage rate remains unchanged? OA. Aggregate supply increases. OB. The quantity of real GDP supplied increases. OC. Resource prices increase by the same percentage as the increase in the price level. O D. Potential GDP increases. 145 135- 125- 115- 105- 95- 85+ Price level (GDP price index, 2012-100) Potential GDP 18.0 A$ 21.0 19.0 20.0 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question. 22.0 Q Q G

The graph shows an economy's potential GDP and the aggregate supply curve. Draw an arrow that shows a rise in the price level when the money wage rate remains unchanged. Label it 1. Draw an arrow that shows a rise in the price level accompanied by the same percentage rise in the money wage rate and the money prices of other resources. Label it 2. What is the effect of an increase in the price level when the money wage rate remains unchanged? OA. Aggregate supply increases. OB. The quantity of real GDP supplied increases. OC. Resource prices increase by the same percentage as the increase in the price level. O D. Potential GDP increases. 145 135- 125- 115- 105- 95- 85+ Price level (GDP price index, 2012-100) Potential GDP 18.0 A$ 21.0 19.0 20.0 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question. 22.0 Q Q G

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. GDP is rising and price of crude oil in declining. P Demand :...... Supply: ...... Equilibrium Quantity_:……..... Equilibrium Price : ......
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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.
Note: Line segments will automatically connect the points. PRICE LEVEL (Billions of dollars) 200 160 120 0 80 160 240 REAL GDP (Index numbers) The equilibrium price level is 320 400 Initial AD The change in government spending the multiplier effect. SRAS New AD ✓, and the equilibrium level of real output is Suppose that the government spending increases by $16 billion and the expenditure multiplier in this economy is 5. On the previous graph, use the purple points (diamond symbols) to illustrate the effect of the increase in government spending on the aggregate demand (New AD) curve. the equilibrium level of real output by . The price level increase
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In the intermediate range of an aggregate supply curve an increase in total demand will O cause unemployment and deflation. cause employment to fall, but the price level to rise. increase employment, output, and the price level. O increase employment and output but not the price level.