MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
10th Edition
ISBN: 9781319467203
Author: Mankiw
Publisher: MAC HIGHER
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Chapter 14, Problem 2QQ
To determine
The change in the
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Students have asked these similar questions
What would be the effect of an unexpected increase in the price of oil on a graph showing aggregate demand and short-run
aggregate supply that is initially in equilibrium?
The effect of an unexpected increase in the price of oil will be for the
A. aggregate demand curve to shift down.
B. aggregate demand curve to shift up.
C. short-run aggregate supply curve to shift up.
D. short-run aggregate supply curve to shift down.
The new equilibrium will be where
A. the new short-run aggregate supply curve interects the original aggregate demand curve.
B. the original short-run aggregate supply curve interects the original aggregate demand curve.
C. the new short-run aggregate supply curve interects the original short-run aggregate supply curve.
D. the new short-run aggregate supply curve interects a new aggregate demand curve.
The quantity of aggregate output demanded will fall if
Select one:
a. net taxes are reduced.
b. the price level increases.
c. government spending increases.
d. Aggregate supply increases.
Unemployment would decrease and prices would increase if
a.
aggregate supply shifted left.
b.
aggregate demand shifted right.
c.
aggregate supply shifted right.
d.
aggregate demand shifted left.
Chapter 14 Solutions
MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
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- Europe and Aisa both fall into deep economic recessions. What impact will this have on the U.S. aggregate demand? A. None B. U.S. aggregate demand shifts will be offset by aggregate supply shifts C. U.S. aggregate demand will decrease D. The U.S. aggregate demand curve will shift to the rightarrow_forwardA change in the expected price level shiftsa.the aggregate-demand curve.b.the short-run aggregate supply-curve,but not the long- run aggregate supply-curve.c.the long-run aggregate supply-curve,but not the short- run aggregate supply-curve.d.both the short-run and the long-run aggregate supply-curvearrow_forwardWhen production costs rise, in the short run: When production costs rise, in the short run: A. the aggregate-supply curve shifts down to the right B. the aggregate-demand curve shifts down to the left C. the aggregate-demand curve shifts up to the right D. the aggregate-supply curve shifts up to the left E. both the aggregate-demand curve and the aggregate-supply curve shift to the leftarrow_forward
- If the economy is operating way below capacity, an increase in aggregate demand causes a big change in the and small change in Select one: a. aggregate demand; aggregate supply b. price level; output C. output; price level d. aggregate supply; aggregate demandarrow_forward8. Do the following events have their initial impact on aggregate demand, long run aggregate supply, or short run aggregate supply? Do the curves shift to the right or to the left? Show, using a graph for each question. a. The new government in Canada increases income taxes. AD/AS/LRAS: Equilibrium Price: Equilibrium Quantity: b. There has been an increase in investment in postsecondary education in Canada AD/AS/LRAS: Equilibrium Price: Equilibrium Quantity: c. Canada experiences downward pressure on nominal wages. AD/AS/LRAS: Equilibrium Price:, Equilibrium Quantity: 9 6arrow_forwardWhich of the following is consistent with the theory of aggregate supply? a. An increase in the expected price level shifts the short-run aggregate-supply curve to the left, and an increase in the actual price level shifts the short-run aggregate supply to the left. b. An increase in the expected price level shifts the short-run aggregate-supply curve to the right, and an increase in the actual price level shifts the short-run aggregate supply to the right. c. An increase in the expected price level shifts the short-run aggregate-supply curve to the left, and an increase in the actual price level does not shift the short-run aggregate supply. d. An increase in the expected price level shifts the short-run aggregate-supply curve to the right, and an increase in the actual price level does not shift the short-run aggregate supply. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of…arrow_forward
- An increase in consumer confidence in a country will result in a 1.shift of the aggregate demand curve to the right. 2.shift of the aggregate demand curve to the left. 3.movement up the aggregate demand curve to a lower aggregate output. 4.movement down the aggregate demand curve to a higher aggregate output.arrow_forwardConsider each of the following events and then figure out how each of these events will affect the aggregate demand curve. a. An increase in the price level will cause a b. An increase in government purchases will cause a c. An increase in state income taxes will cause a d. An increase in interest rates will cause a e. A faster income growth in other countries will cause a the aggregate demand curve. the aggregate demand curve. the aggregate demand curve. the aggregate demand curve. the U.S. aggregate demand curve.arrow_forwardThe effect of an increase in the price level on the aggregate-demand curve is represented by a a. movement to the left along a given aggregate-demand curve. b. shift to the right of the aggregate-demand curve. c. shift to the left of the aggregate-demand curve. d. movement to the right along a given aggregate-demand curve.arrow_forward
- There are several determinants of aggregate supply that can cause the aggregate supply curve to shift. a. Describe those determinants and give an example of a change in each. b. Draw and label an aggregate supply diagram that illustrates the effect of the change in each determinant.arrow_forwardWhich of the following would cause the long run aggregate supply to decrease?O. A civil war in the country leads to destruction of property and loss of life.O. The Federal Reserve purchases $500 million in bonds from the banks.O. An unusually low temperatures in the midwest results in fewer crops than last year.O. A major breakthrough in extraction (fracking) leads to more efficient drilling of natural gas.arrow_forward1) Define aggregate demand and aggregate supply. 2) Give three reasons why the aggregate demand curve slopes downward. 3) Give three reasons why the aggregate supply curve slopes upwards.arrow_forward
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