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| When the economy goes into a recession. real GOP ---- and a. rises, rises b. rises, falls c falls. rises d. falls, falls |
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- 8. In the economy, we found a recessionary gap of 50, relative to potential output of 4,800. Suppose that, in this economy, the natural rate of unemployment rate is 5%. What will the actual unemployment rate be after the recessionary gap appears?"onvince his colleague Bilal that the 24. Firas a university student, trying to Maximum capacity output Net exports O Full employment range of output the five regions of the aggregate Unemployment supply curve diagram? O he ed hifts o ore spending. 23. Which of the following is not one ofThe French economist Jean-Baptiste Say trans- formed the equality of total output and total spending into a law that can be expressed asa. unemployment is not possible in the short run.b. demand and supply are never equal.c. supply creates its own demand.d. demand creates its own supply.
- PRICE LEVEL a a" a" LRAS Y, Y₂ QUANTITY OF OUTPUT 8 a. rising price level and a falling level of output, as the economy moves to point A. b. falling price level and a falling level of output, as the economy moves to point C. c. falling price level and a rising level of output, as the economy moves to point A O d. rising price level and a rising level of output, as the economy moves to point C. SRAS, SRAS 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 ADA9does not increase output and employment but prices. O a. None of these O b. Inflationary gap O c. Deflationary gap O d. Equilibrium
- The graph below shows an economy operating at equilibrium in both the short run and long run at its full employment level of output. a. Show what happens when this economy moves from its full-employment equilibrium into a period of stagflation. Use the graph to draw either a new AD curve or new AS curve to demonstrate stagflation in this economy Instructions: Use the tool provided "New Curve to plot the appropriate line. After placing the curve, click on "Select and choose whether to label the curve "AD" or "AS" from the dropdown menu. Aggregate Demand and Aggregate Supply Price Level LRAS Tools New Curve 0Economics How are aggregate output and the real interest rate determined in compettive egulbum? OA The aggregate oulput can be found by multiplying current employment by current real wage at the intesection of the current labour supply and demand curves, given the raal inderest rate. and ssubtracting the level of investment in the economy OB. Cument aggregata output and the real interest rate are determined by the intersection of the output supoly and demand ouves OC. Cunent aggregate output can be found by finding current employment from the intersection of the current labour supply and domand ourves given the real interest rate and aocounting tor total tactor productivity OD. The real interest rate is determined by the slope of the output supply curve at a given level of aggregate outputI is economy IS In a recessIonary yap wrieı ure aciuai GUP IS Delow pouu DIIIIUI. b. Explain why wages rise when output is greater than potential but fall when output is less than potential. When there is a recessionary gap, if there is no intervention in the economy the level of actual unemployment will rise above the natural level of unemployment in the economy. Thus, there will be more competition among workers to find a job, which will put downward pressure on the level of wages. 1- c. For each situation, fill in the table by identifying whether the AS curve shifts up, down, or is stationary. Real GDP Rate of Shift of 760 770 780 7E0o a10 s20 B30o 840 B50 Situation (billions Wage of dollars) Change AS Curve A 760 3.0 % shifts down B 780 1.5 % shifts down 800 0.0 % is stationary D 820 1.0 % shifts up 845 2.0 % shifts up Level of GDP d. Use the multipoint drawing tool to plot and label the Phillips curve on a scale diagram for this economy. Use all and only the points provided in the…
- if european economies experience a period of sustained recession and the US does not, what will happen in the US a. an increase in aggregate deman b. increase in aggregate supply c. decrease in aggregate demand d. decrease in aggregate supplyThe government increase its spending by $100. 1. Explain the effect of this change in government expenditure on AD 2.Explain the effect of this change on the short run equliibrumoutput and inflationStagflation is the combination of--------. Select one: a. a recessionary gap and a falling price level b. no recessionary or expansionary gap, but a rising price level c. an expansionary gap and a falling price level d. a recessionary gap and a rising price level
