The standard AD-AS model suggests that frequent unpredictable swings in AD will lead to a business cycle pattern with: inflation during expansions and deflation during recessions. stable prices during expansions and inflation during recessions. inflation during expansions and inflation during recessions. deflation during expansions and stable prices during recessions. inflation during expansions and stable prices during recessions.

The standard AD-AS model suggests that frequent unpredictable swings in AD will lead to a business cycle pattern with: inflation during expansions and deflation during recessions. stable prices during expansions and inflation during recessions. inflation during expansions and inflation during recessions. deflation during expansions and stable prices during recessions. inflation during expansions and stable prices during recessions.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

According to the AS-AD model, which of the following is true about output when there is an decrease in the SRAS and no other change? (Select all that are true) There is no change in output in the long run There is a decrease in output in the long run There is an increase in output in the short run There is an increase in output in the long run There is a decrease in output in the short run There is no change in output in the short run
A decrease in the price level will:(a) shift the AS curve to the left.(b) shift the AD curve to the left.(c) shift the AS curve to the right.(d) leave both the AD curve and the AS curve unchanged.
In long run macroeconomic models the effects of exogenous shocks, price rigidities and expectational errors are fundamental ingredients. True or False
A vertical aggregate supply graph indicates that aggregate demand has no effect on: A) Prices B) Inflation C) Wages D) Quantity of output
During 2000, there was a sharp reduction in stock prices and a sharp increase in the world price of crude oil. How will aggregate demand and aggregate supply in the United States be influenced by these two factors? Using the AD-AS model, explain the expected impact on output.
A recessionary gap exists when the macro economy is in equilibrium at less than the potential output of the the economy because aggregate demand is insufficient to fully employ all of society' s resources. In other words, the equilibrium (AD = AS) occurs to the left of the vertical long-run supply curve. At this point, potential output is reached ( full employment) and if any unemployment occurs, then it is due to structural or frictional; that is, the economy is at its natural rate of employment. True or falses
Q.1.17 A decrease in the price level will: (a) shift the AS curve to the left.(b) shift the AD curve to the left.(c) shift the AS curve to the right.(d) leave both the AD curve and the AS curve unchanged.
The general equilibrium in the IS-LM model occurs where a. the FE line intersects with the IS curve b. the FE line intersects with the LM curve c. the IS curve intersects with the LM curve d. Not information to tell .