Why is the potential GDP line vertical?   The potential GDP line is vertical because _______.     A. potential GDP is dependent on the price level   B. with a constant money wage rate, the real wage rate rises as the price level rises   C. potential GDP and the quantity of real GDP supplied are equal at every price level   D. potential GDP is independent of the price level

Q: The long run aggregate supply curve is vertical because a. the actual price level may not equal the…

A: Equilibrium is where Aggregate demand curve intersects the aggregate supply curve.  AD curve is…

Q: If the nation's capital stock increases which of following will be affected? O Long Run Aggregate…

A: The whole amount of capital employed in the production of goods and services, including factories,…

Q: Price index The graph below shows, the aggregate demand and supply for the economy of Etrusca. a.…

A: Here's a summary:1. **AD2 Shift**: The AD2 curve is drawn by shifting the original Aggregate Demand…

Q: Price LRAS Level SRAS, SRAS; P2 AD Quantity of Output Refer to Figure. A movement from P1 and Y2, to…

A: A movement from P1 and Y2, to P2 and Y1 would be consistent with Stagflation. Stagflation:…

Q: The relationship between businesses and households determines how income and output flow through the…

A: "Gross domestic product or GDP indicates the market or monetary value of all the final commodities…

Q: With the  AD-AS graph, what variable is on the vertical axes?

A: The AD( Aggregate Demand) and AS(AS) model is the one that represents the national income along with…

Q: In an economy, potential GDP is $20 trillion and the natural unemployment rate is 4 percent. If the…

A: Okun's Law states that every 1 percentage decrease in unemployment rate increases the real GDP by…

Q: 1479 1770 1047 1040 1040 O True O False YEAR Source: "Current-delar and Real GDR Bureau of Economics…

A: The graphical representation highlights the business cycle of the US economy running between 1947 to…

Q: The total value of real GDP that all sectors of the economy (C + I + G + Xn) are willing to purchase…

A: The equilibrium is where the aggregate demand equals aggregate supply.  Aggregate demand is the sum…

Q: The economy depicted in the graph is:

A: The above graph shows the AD/AS model, where Aggregate demand is below the Long run Aggregate…

Q: What is the quantity of real GDP produced if the real wage rate is at the​ full-employment…

A: Real GDP is inflation adjusted money value of all final goods and services produced in an economy.

Q: The economy has shifted and the quantity of the real GDP supplied has increased. What has…

A: This can be defined as a concept that shows the continuous progress in any nation It does not happen…

Q: What term is used to describe the maximum quantity that an economy can produce, in the context of…

A: In macroeconomics, potential output/GDP alludes to the most elevated level of genuine GDP that can…

Q: If the price level rises and the money wage rate remains constant, what happens to the quantity of…

A: Real wages are those that are calculated with inflation taken into account. On the other hand, cash…

Q: quantity of labor employed and the equilibrium real wage rate? Real wage rate (2012 dollars per…

A: Labor market equilibrium occurs where the quantity of labor supplied is equal to the quantity of…

Q: . When the economy is in a recession:a. tax eceipts decrease, transfer payments increase, and al GDP…

A: The recession refers to deficient demand in the economy, or demand that is not enough in the economy…

Q: How does an increase in the price level affect the quantity of real GDP supplied in the long run?…

A: Gross Domestic Product refers to the final value of all goods and services produced in a territory…

Q: Stagflation is the combination of rising price level and rising real GDP lower price levels and…

A: Stagflation is an economic event which derived it's term from a combination of stagnation and…

Q: The vertical portion of the aggregate supply curve shows that at full employment an increase in the…

A: Macroeconomics studies the economy as a whole. It analyzes the national income, employment,…

Q: All of the following, except one, will cause an increase in both aggregate supply and long-run…

A: Supply is defined as the stock of goods available on the market. The producers will produce goods on…

Q: Suppose that a decrease in the demand for goods and services pushes the economy into a recession. In…

A: Recession is defined as the period of time in which the there is a significant fall in the economic…

Q: Figure 8-2 Price Level (P) a a Q, Real GDP (Q) Refer to Figure 8-2. A movement from point A to point…

A: The curve AD1 represents the aggregate demand curve. The aggregate demand curve is a curve that…

Q: TB 05-48 Refer to Graph B to answer this question. As... Refer to Graph B to answer this question.…

A: Aggregate demand refers to the total demand for goods and services within an economy at a given…

Q: eal tput Demanded (Index Value) Output Supplied $200 300 $500 300 250 450 400 200 400 500 150 300…

A: A shortage is said to exist when the demand exceeds the supply of any good. A surplus is said to…

Q: Private spending Price level 0 ON Q₁ Real Output B с Q1 Q₂ Real Output AE₂ -AE₁ -AD₂ AD₁ 7. Refer to…

A: Aggregate demand refers to the total amount of goods and services that households, businesses, the…

Q: Price Level AD Yu YY Rea National Income 4. Referring to the above diagram, which of the following…

A: From the diagram it can be seen that AD and AS are intersecting each other where the AS is seen to…

Q: Amount of Amount of Real GDP Price Level Real GDP Demanded, (Price Index) Supplied, Billions…

A: a) According to the question, the schedule for the demand and supply is given. We have to find out…

Q: Based on the graph, a decrease in ________ could cause the economy to move from Point A to Point B.…

A: Aggregate demand is the sum of consumption, investment, government spending and net export.  So,  AD…

Q: PRICE LEVEL à à à LRAS B QUANTITY OF OUTPUT O a. rising price level and a falling level of output,…

A: In the long run, it is expected that most people have adjusted to the economic situation. It would…

Q: Real GDP Real GDP Demanded, Price Level Supplied, Billions (Price Index) Billions $100 300 $450 200…

A: Price Level  Quantity Demanded ($) Quantity Supplied ($) 300 100 450 250 200 400 200 300 300…

Q: efer to Figure 17. If the economy starts at A, a lower real interest te moves the =conomy from A to:…

A: Option B is correct

Q: is depicted by the graph to the right orium price level and output level respectively are: 80 and S…

A: The AD-AS model shows what determines the total demand and total supply for the economy and how…

Q: What is the effect of an increase in the price level when the money wage rate remains​ unchanged?…

A: The short-run aggregate supply(AS) in Keynesian models is upward slanting/slopping, showing that…

Q: 12. If _____ is rising, it likely means that the economy is shrinking. A. consumer spending B.…

A: GDP is the value of final goods and services produced in the economy within a given period of time

Q: Aggregate Supply and Aggregate Demand Real GDP Supplied Price $ 250 $ 500 $ 750 $1000 1500 3000 4500…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…