Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 20, Problem 19SQ
To determine
The indication of the shift in the aggregate demand curve.
Expert Solution & Answer
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Aggregate Supply, and a New Equilibrium
How will each of the following likely change the aggregate supply curve?
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Increase in the labor force.
Increase in capital.
Increase in the cost of raw materials.
7/20 answered
Decrease in costs created by regulations.
Increase in unemployment.
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The aggregate supply curve shifts to the right.
The aggregate supply curve shifts to the right.
The aggregate supply curve shifts to the right.
The aggregate supply curve does not move but there
is movement along the curve.
The aggregate supply curve shifts to the left.
The aggregate supply curve shifts to the left.
The aggregate supply curve does not move but there
is movement along the curve.
1) 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.
7) Spending on the war in Afghanistan is essentially
categorized as government purchases. How do
increases in spending on the war in Afghanistan affect
the aggregate demand curve?
A) They will move the economy up along a stationary
aggregate demand curve.
B) They will move the economy down along a
stationary aggregate demand curve.
C) They will shift the aggregate demand curve to the
right.
D) They will shift the aggregate demand curve to the
left.
Chapter 20 Solutions
Economics For Today
Ch. 20.7 - Prob. 1YTECh. 20.A - Prob. 1SQPCh. 20.A - Prob. 2SQPCh. 20.A - Prob. 3SQPCh. 20.A - Prob. 4SQPCh. 20.A - Prob. 5SQPCh. 20.A - Prob. 6SQPCh. 20.A - Prob. 1SQCh. 20.A - Prob. 2SQCh. 20.A - Prob. 3SQ
Ch. 20.A - Prob. 4SQCh. 20.A - Prob. 5SQCh. 20.A - Prob. 6SQCh. 20.A - Prob. 7SQCh. 20.A - Prob. 8SQCh. 20.A - Prob. 9SQCh. 20.A - Prob. 10SQCh. 20.A - Prob. 11SQCh. 20.A - Prob. 12SQCh. 20.A - Prob. 13SQCh. 20.A - Prob. 14SQCh. 20.A - Prob. 15SQCh. 20.A - Prob. 16SQCh. 20.A - Prob. 17SQCh. 20.A - Prob. 18SQCh. 20.A - Prob. 19SQCh. 20.A - Prob. 20SQCh. 20 - Prob. 1SQPCh. 20 - Prob. 2SQPCh. 20 - Prob. 3SQPCh. 20 - Prob. 4SQPCh. 20 - Prob. 5SQPCh. 20 - Prob. 6SQPCh. 20 - Prob. 7SQPCh. 20 - Prob. 8SQPCh. 20 - Prob. 9SQPCh. 20 - Prob. 10SQPCh. 20 - Prob. 11SQPCh. 20 - Prob. 1SQCh. 20 - Prob. 2SQCh. 20 - Prob. 3SQCh. 20 - Prob. 4SQCh. 20 - Prob. 5SQCh. 20 - Prob. 6SQCh. 20 - Prob. 7SQCh. 20 - Prob. 8SQCh. 20 - Prob. 9SQCh. 20 - Prob. 10SQCh. 20 - Prob. 11SQCh. 20 - Prob. 12SQCh. 20 - Prob. 13SQCh. 20 - Prob. 14SQCh. 20 - Prob. 15SQCh. 20 - Prob. 16SQCh. 20 - Prob. 17SQCh. 20 - Prob. 18SQCh. 20 - Prob. 19SQCh. 20 - Prob. 20SQ
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- Europe and Asia both fall into deep economic recessions. What impact will this have on U.S. aggregate demand? OPTIONS: U.S. aggregate demand curve will shift to the right. U.S. aggregate demand will remain unchanged. None. A nation’s aggregate demand is only affected by its own economic conditions. U.S. aggregate demand will decrease.arrow_forwardIf an economy is on the horizontal portion of the aggregate supply curve, then it is: A.)in a severe recession. B.)overheating. C.)at full employment. D.)experiencing inflation.arrow_forwardSuppose our economy is in macroeconomic equilibrium (also called "general equilibrium") with an upward-sloping aggregate supply curve and a downward-sloping aggregate demand curve. An increase in aggregate demand will: Question 5 options: a) Increase aggregate supply. b) Decrease the price level. c) Causes the aggregate supply to shift to the right. d) Increase real GDP. e) Reduce the number of discouraged workers in the unemployment rate.arrow_forward
- Which of the following would shift aggregate demand to the right? 1) The value of the dollar increases. 2) There is a decline in consumer confidence. 3) Stock market values increase by 20%. 4) College graduates are having a difficult time finding jobs. 5) A fall in the price level increases the value of real wealth.arrow_forwardWhat 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.arrow_forwardWhich of the following would cause the aggregate supply curve to increase... Group of answer choices The government has reduced its spending by more than 10% over the last 2 years Throughout the economy, workers are using better equipment and output per hour is rising. Consumers are more confident and spending more than before. Energy prices such as gas and electricity have increased rapidly throughout the country.arrow_forward
- Suppose that the economy of Monaco is represented by the aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS) curves in the accompanying graph. a. Based on the graph, Monaco is experiencing a deflationary gap. currently at long-run equilibrium. experiencing an inflationary gap. b. Which of the following policies eliminate this phenomenon? A birth control subsidy An increase government purchases of goods and services An increase in taxes An increase in government transfers A cut in taxes c Suppose that the government implements the policy proposed in part b. Shift the aggregate demand curve on the graph accordingly. Aggregate price level LRAS 7 6 X 5 4 3 AD 2 3 10 9 8 2 1 0 0 1 4 5 6 Real GDP 7 8 SRAS 9 10arrow_forward35arrow_forwardIllustrate graphically and interpret the change in equilibrium price and quantity using short-run Aggregate Demand and Supply curve when: Prices of raw materials of suppliers increase. The Federal Bank increases the interest rate. Government decides to spend less on development of infrastructure of the country. New skilled workers join the workforce. Factories and plant got destroyed due to outbreak of fire.arrow_forward
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