Use the model of aggregate demand and aggregate supply to illustrate the impact of this change in the interest rate on output and the price level in the short run. Price Level LRAS The price level will fall. The demand for money will fall. Aggregate Supply Yes Aggregate Demand Quantity of Output O No The equilibrium interest rate will rise. Aggregate Demand Which of the following will happen when the economy makes the transition from its short-run equilibrium to its long-run equilibrium? (Note: Do not adjust the graphs to reflect the transition to the long run.) Check all that apply. Aggregate Supply LRAS ? Is this analysis consistent with the proposition that the money supply has real effects in the short run but is neutral in the long run?

Use the model of aggregate demand and aggregate supply to illustrate the impact of this change in the interest rate on output and the price level in the short run. Price Level LRAS The price level will fall. The demand for money will fall. Aggregate Supply Yes Aggregate Demand Quantity of Output O No The equilibrium interest rate will rise. Aggregate Demand Which of the following will happen when the economy makes the transition from its short-run equilibrium to its long-run equilibrium? (Note: Do not adjust the graphs to reflect the transition to the long run.) Check all that apply. Aggregate Supply LRAS ? Is this analysis consistent with the proposition that the money supply has real effects in the short run but is neutral in the long run?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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An improvement in the level of technology in an economy will result in An upward movement along the aggregate supply curve An outward shift of the aggregate supply curve O A downward movement along the aggregate supply curve An inward shift of the aggregate supply curve
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Determine whether each of the following would cause a shift of the aggregate demand curve, a shift of the aggregate supply curve, a shift in neither curve, or shift in both curves. If a shift is caused, indicate which curve shifts, and in which direction it shifts. What happens to aggregate output and the price level in each case? 4. The wages rate decreases.
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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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.
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.