Use the graph to answer the question that follows. Price Level PLO To LRAS Y₁ Real GDP SRAS AD Assume that the economy is in a short-run equilibrium as shown on the accompanying graph. Without government intervention, what adjustment over time can be expected? O The wage rate should fall, short-run aggregate supply will increase, and the economy will adjust to full employment. O The wage rate should increase, short-run aggregate supply will decrease, and the economy will adjust to full employment. O Government spending will decrease, aggregate demand will decrease, and cyclical unemployment will increase. O Taxes will decrease, aggregate demand will decrease, and the economy will adjust to full employment. O Long-run aggregate supply will decrease until it equals the current aggregate demand and short-run aggregate supply.

Use the graph to answer the question that follows. Price Level PLO To LRAS Y₁ Real GDP SRAS AD Assume that the economy is in a short-run equilibrium as shown on the accompanying graph. Without government intervention, what adjustment over time can be expected? O The wage rate should fall, short-run aggregate supply will increase, and the economy will adjust to full employment. O The wage rate should increase, short-run aggregate supply will decrease, and the economy will adjust to full employment. O Government spending will decrease, aggregate demand will decrease, and cyclical unemployment will increase. O Taxes will decrease, aggregate demand will decrease, and the economy will adjust to full employment. O Long-run aggregate supply will decrease until it equals the current aggregate demand and short-run aggregate supply.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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PRICE LEVEL O a. C to D. Ob. D to C. Oc.B to A Od. A to B. D LRAS O B AD QUANTITY OF OUTPUT SRAS, SRAS AD Refer to Figure 34-2. If the economy is in long-run equilibrium, then an adverse shift in short-run aggregate supply would move the economy from
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Which of the following is incorrect about the Keynesian model shown below? Price Level P₁ AD₁ E₁ Y₁ Real GDP SRAS AD E₁ Yp
Price Level LAS AS1 AD AS2 Real GDP Refer to the graph above to answer this question. If the economy was initially at point A, what would a movement to point B suggest? O The movement could be the result of an increase in nominal wages. The movement could be the result of an increase in prices. The movement could be the result of an increase in aggregate demand. The movement could be the result of increased government spending. The movement could be the result of a decrease in the costs of production.
Which of the following causes the short-run aggregate supply curve to shift to the right? O A. an increase in the expected price of an important natural resource B. a positive technological change O C. a higher expected future price level O D. a decrease in the capital stock
Figure 34-3 PRICE LEVEL a a a LRAS Y, Y₂ QUANTITY OF OUTPUT SRAS. SRAS. AD Refer to Figure 34-3. Starting from point B and assuming that aggregate demand is held constant, in the long run the economy is likely to experience a falling price level and a falling level of output, as the economy moves to point C. falling price level and a rising level of output, as the economy moves to point A. rising price level and a falling level of output, as the economy moves to point A. Orising price level and a rising level of output, as the economy moves to point C.
Consider an economy with the following aggregate demand (AD) and short-run aggregate supply (SRAS) schedules. Decision-makers have previously made decisions anticipat- ing that the price level during the current period will be p 105° a. Indicate the quantity of GDP that will be produced during the period.
Please refer to the following graph representing a hypothetical macro economy. Assume that the Aggregate Demand curve has recently changed from AD1 to AD2. During that change, which phase of the business cycle was this economy in? Price Level O Expansion O Recession O Recovery O Inflation LRAS AD2 SRAS AD1 Real GDP
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