Economics) "Shoe Industry under Pressure Amid Rising Costs"Rising costs have forced about 15 per cent of shoemanufacturers in a major south China industrialcentre to shut down or relocate in the past year...[the firms have] identified rising wages as a keyfactor behind the closures and relocations fromDongguan...The problems in the footwear industryreflect broader issues affecting manufacturersacross China's Pearl River Delta..." www.ft.com,2/26/2008Using an AS/AD framework to describe the eventsin the story, there would be aA) leftward shift in the SAS curve.B) rightward shift in the AD curve.C) leftward shift in the AD curve.D) rightward shift in the SAS curve

AD curve represents the aggregate demand in the economy and AS curve is a representation of the…

Using an AS/AD framework to describe the events in the story, there would be a A) leftward shift in the SAS curve. B) rightward shift in the AD curve. C) leftward shift in the AD curve. D) rightward shift in the SAS curve

Using an AS/AD framework to describe the events in the story, there would be a A) leftward shift in the SAS curve. B) rightward shift in the AD curve. C) leftward shift in the AD curve. D) rightward shift in the SAS curve

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Using the AD-AS model, which of the following statement better describe what has happened with the pandemic? a. The government discouraged people from engaging in economic activities, which shifted the AD curve left; meanwhile, the government forced the closure of most of the firms in the economy, which shifted the short-run AS curve left, leading to much lower production in the overall economy. b. The government discouraged people from engaging in economic activities, which shifted the AD curve left; meanwhile, the government forced the closure of most of the firms in the economy, which shifted the short-run AS curve left, leading to a lower natural rate of output in the overall economy. c. The government discouraged people from participating in economic activities, which shifted the AD curve right, causing a higher price level for the firm to produce more goods and services. Hence, the short-run aggregate supply shifts to the left, leading to much lower…
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