Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 14.1, Problem 3ST
(a)
To determine
The change in aggregate demand curve.
(b)
To determine
The change in aggregate demand curve.
(c)
To determine
The change in aggregate demand curve.
(d)
To determine
The change in aggregate demand curve.
Expert Solution & Answer
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Students have asked these similar questions
Suppose velocity rises and the money supply falls.
How will things change in the AD–AS framework if a change in the money supply is completely offset by a change in velocity? Check all that apply.
The increase in velocity could shift the AD curve to the left by the same amount as the fall in the money supply shifts the AD curve to the right.
Changes in the money supply would have no effect on Real GDP, the short-run price level, nor the long-run price level.
A change in the money supply would decrease Real GDP, the short-run price level, and the long-run price level.
The increase in velocity could shift the AD curve to the right by the same amount as the fall in the money supply shifts the AD curve to the left.
The graph below shows the long-run aggregate supply
(LRAS), the short-run aggregate supply (SRAS), and
aggregate demand (AD) curves for a given economy.
LRAS
10
Manipulate the curves to show the long run effect of an
increase in money supply.
9.
SRAS
8.
In the long run, an increase in the money supply will result
in the following.
6.
Real GDP:
3
AD
1
0.
01
1
4
6.
8.
6.
10
Real GDP
The aggregate price level
decreases
stays the same
increases
2.
7,
5.
Aggregate price level
Suppose velocity rises and the money supply falls:
How will things change in the AD-AS framework if a change in the money supply is completely
offset by a change in velocity?
The fall in velocity could shift the AD curve to the right by the same amount as the increase in the
money supply shifts the AD curve to the left.
The increase in velocity could shift the AD curve to the right by the same amount as the fall in the
money supply shifts the AD curve to the left.
A change in the money supply would decrease Real GDP, the short-run price level, and the long-run
price level.
The fall in velocity would shift the AD curve to the left by the same amount as the increase in the money
supply shifts the AD curve to the right.
Chapter 14 Solutions
Macroeconomics
Ch. 14.1 - Prob. 1STCh. 14.1 - Prob. 2STCh. 14.1 - Prob. 3STCh. 14.2 - Prob. 1STCh. 14.2 - Prob. 2STCh. 14.3 - Prob. 1STCh. 14.3 - Prob. 2STCh. 14.3 - Prob. 3STCh. 14.4 - Prob. 1STCh. 14.4 - Prob. 2ST
Ch. 14.4 - Prob. 3STCh. 14 - Prob. 1QPCh. 14 - Prob. 2QPCh. 14 - Prob. 3QPCh. 14 - Prob. 4QPCh. 14 - Prob. 5QPCh. 14 - Prob. 6QPCh. 14 - Prob. 7QPCh. 14 - Prob. 8QPCh. 14 - Prob. 9QPCh. 14 - Prob. 10QPCh. 14 - Prob. 11QPCh. 14 - Prob. 12QPCh. 14 - Prob. 13QPCh. 14 - Prob. 14QPCh. 14 - Prob. 15QPCh. 14 - Prob. 16QPCh. 14 - Prob. 17QPCh. 14 - Prob. 18QPCh. 14 - Prob. 19QPCh. 14 - Prob. 1WNGCh. 14 - Prob. 2WNGCh. 14 - Prob. 3WNGCh. 14 - Prob. 4WNGCh. 14 - Prob. 5WNGCh. 14 - Prob. 6WNGCh. 14 - Prob. 7WNGCh. 14 - Prob. 8WNG
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