Using the three-point curved line drawing tool, show an increase in the economy's short run aggregate supply (AS). Properly label this curve. Note: Carefully follow the instructions above, and only draw the required object. Which of the following events would NOT produce a rightward shift in the short-run AS curve? O A. The enactment of Reagan-style supply-side economic policies designed to increase production. O B. A significant increase in the country's incidence of bad weather and natural disasters. OC. A significant acceleration in the country's rate of technological progress. O D. The discovery of enormous reserves of oil and natural gas. Price level, P Aggregate output (income), Y ASO

Using the three-point curved line drawing tool, show an increase in the economy's short run aggregate supply (AS). Properly label this curve. Note: Carefully follow the instructions above, and only draw the required object. Which of the following events would NOT produce a rightward shift in the short-run AS curve? O A. The enactment of Reagan-style supply-side economic policies designed to increase production. O B. A significant increase in the country's incidence of bad weather and natural disasters. OC. A significant acceleration in the country's rate of technological progress. O D. The discovery of enormous reserves of oil and natural gas. Price level, P Aggregate output (income), Y ASO

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 6 O Figure 13-3 shows the relationship between real GDP and the price level in an economy. In the figure, Figure 13-3 Price Level O a. curve C O b. curve B O c. curve E O d. curve A O e. curve D A D Real GDP نا B C E Moving to the next question prevents changes to this answer. represents long-run aggregate supply?
5. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 5%. Larry, a client of First Main Street Bank, deposits $200,000 into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans). Assets Liabilities Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 5%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 200,000
Look at Figure 2. Assume this aggregate demand diagram represents an economy with government, where: a = exogenous consumption b = the marginal propensity to consume t = the tax rate |= investment G = government spending Y = income Figure 2 Aggregate demand AD, AD. 45° Income What is the equation for the aggregate demand schedule ADo? Select one: O ADO = b+ a(1 - t)G +1+ Y O ADO = a + b(1 – 1)Y + 1+ G O ADO = a + b(1 - t) I+ Y+ G O ADO = b+ a(1 – 1)Y + /+ G Next page > ( Previous page PHILIPS
In the diagram, the economy has Aggregate price level LRAS SRAS, P, Aggregate Demand Yp Y, Real GDP An inflationary gap, so in the long run wages will fall, causing AD curve ti shift to the left. An inflationary gap, so in the long run wages will rise, causing the SRAS curve to shift to the left. O A recessionary gap, so in the long run wages will fall, causing the AD curve to shift to the left. O A recessionary gap, so in the long run wages will fall, causing the SRAS curve to shift to the right.
1. Assume that there is economy with increasing of government expenditure and interest rate and aggregate price level are endogenous. Please use graph to show the increasing by using: b) IS-LM model c) AD-AS model with the horizontal aggregate supply curve in the short run (assume both cases initially started from natural level of income)
10. Which of the following are reasons why the short-run Aggregate Supply curve shown in the right-hand diagrams may be vertical? a) The economy at this level of real GDP would be operating beyond the full-employmetn level. b) Inflationary expectations have set-in so, the owners of resources are acting on these inflationary expectations and insisting on higher resource prices in anticipation of future products price inflation. c) Short-run Aggregate Suply in the Classical model is always constant. d) All the above e) Only (a) and (b) are true. f) None of the above.
Why is the aggregate demand curve downsloping? Mention three ways of explanations to answer this. Specify how your explanation differs from the explanation for the downsloping demand curve for a single product.
Price level AD AD Real GDP FIGURE 23-4 Refer to Figure 23-4. Suppose the Canadian economy is initially in equilibrium at point A. An unexpected shock then shifts both the AD and the AS curves as shown and results in a new equilibrium represented by point B. Which of the following events could cause such a shock? Select one: O A. a decrease in the world price of oil O B. an increase in the net tax rate O C. an increase in factor prices O D. a decrease in firms' desired investment experiditures a decrease in labour productivity
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Consider the graph at right showing the long-run aggregate supply (LAS) and the aggregate demand (AD) curves. Suppose the long-run aggregate supply curve shifts to a real GDP level of $75. O A. The equilibrium price level will fall, and equilibrium real GDP will decrease. B. The equilibrium price level will fall, and equilibrium real GDP will increase. C. The equilibrium price level will rise, and equilibrium real GDP will increase. OD. The equilibrium price level will rise, and equilibrium real GDP will decrease. ----- Price level Po LRAS AD 0 10 20 30 40 50 Real GDP 60 70 80 90 100
The economy is depicted in the graph to the right. a. Suppose, there are new discoveries of key raw materials. Which of the following best describes the result of this event? O A. The short-run aggregate supply curve shifts out while the long-run aggregate supply curve shifts in. OB. Both the short-run and long-run aggregate supply curves shift outward. OC. The short-run aggregate supply curve shifts inward while the long-run aggregate supply curve shifts outward. OD. Both the short and long-run aggregate supply curves shift inward. b. Complete the diagram. 1.) Using the line drawing tool, draw the new long-run aggregate supply curve representing this shock. Label it as LRAS,. 2.) Using the 3-point curved line drawing tool, draw the new SRAS representing this shock. Label it 'SRAS,'. Carefully follow the instructions above, and only draw the required objects. to search O
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