What do the wealth and foreign trade effects have in common? They both help to explain: shifts in the aggregate supply curve why the aggregate supply curve is downward-sloping shifts in the aggregate demand curve why the aggregate supply curve is upward-sloping why the aggregate demand curve is downward-sloping

What do the wealth and foreign trade effects have in common? They both help to explain: shifts in the aggregate supply curve why the aggregate supply curve is downward-sloping shifts in the aggregate demand curve why the aggregate supply curve is upward-sloping why the aggregate demand curve is downward-sloping

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Use appropriate graph(s) to explain the effect of each of the following events, if any, on the position of the short- and long-run aggregate supply curves and the aggregate demand curve for a small open economy. a) The country becomes home to thousands of immigrants who significantly increase its labour force. b) The Central Organization of Trade Unions in the country wins a 10 percent increase in money wage rates for low-income workers. c) There is a decrease in the income of the country's major trading partners. d) The country starts to harness geothermal energy, which it puts to use and sells the excess energy to neighbouring states.
4.1 Why does the short-run aggregate supply curve slope upward? 4.2 Explain why the long-run aggregate supply curve is vertical. Then, (verbally and graphically) explain how each of the following events would affect the long-run aggregate supply curve. a. A lower price levels b. A decrease in the labor force c. A decrease in the quantity of capital goods d. Technological change
Which of the following would properly be classified as an unfavorable supply shock? a)The interest rate decreases, spurring investment spending. b)The government introduces a set of market reforms that strengthens property rights and makes it easier and safer for buyers and sellers to write contracts. c)The world price of oil increases rapidly without warning and is expected to remain at the new high level for many years, making it more expensive for all firms to produce goods and services. d)There is a technological improvement that allows firms to reduce their costs of production permanently. e)There is an increase in government spending.
What is the main driving force behind plate tectonics? a) Solar radiation b) Mantle convection c) Earth's rotation d) Gravitational pull
Following the equation: Y = C + I + G + NX will the below examples increase or decrease the aggregate demand in Pakistan? What will be the shift in position for below situations? Widespread fear of recession (1 Mark) The appreciation in the Pakistani Rupee rate (1 Mark) A boom in the stock market (1 Mark) An increase in transfer payment (1 Mark) A decrease in real interest rate in Pakistan (1 Mark)
All else equal, which of the following will result in a recession in the short run? Select all the answers that apply. Select one or more: A leftward/upward shift in the short run aggregate supply curve A rightward shift in the aggregate demand curve A leftward shift in the aggregate demand curve A rightward/downward shift in the short run aggregate supply curve
Aggregate Demand and Aggregate Supply - End of Chapter Problem A fall in the value of the dollar against other currencies makes U.S. final goods and services cheaper to foreigners, even though the U.S. aggregate price level remains the same. As a result, foreigners demand more U.S. aggregate output. Your study partner says that this represents a movement down the aggregate demand curve because foreigners are demanding more in response to a lower price. You, however, insist that this represents a rightward shift of the aggregate demand curve.
Subsidies: Governments can provide subsidies to businesses that are most affected by the supply shock. For example, if a sudden rise in the price of oil is causing higher transportation costs, governments can provide subsidies to help offset those costs. Explain that graphically please.
If Australia, which imports goods from the United States, went into recession, we should expect that U.S. net exports would fall, making the aggregate demand shift right. fall, making the aggregate demand shift left. rise, making the aggregate demand shift right. rise, making the aggregate demand shift left.
Classify each of the following as a supply shock or a demand shock. Use a graph to show the effects on inflation and output in the short run and in the long run. Financial frictions increase. Steel workers go on strike for four weeks. Households and firms become more optimistic about the economy. Favorable weather produces a record crop of soybeans and cotton in the Midwest.