Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 24, Problem 49CTQ
If firms become more optimistic about the future of the economy and, at the same time, innovation in 3-D printing makes most workers more productive, what is the combined effect on output, employment, and the
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Chapter 24 Solutions
Principles of Economics 2e
Ch. 24 - Describe the mechanism by which supply creates its...Ch. 24 - Describe the mechanism by which demand creates its...Ch. 24 - The short run aggregate supply curve was...Ch. 24 - In the AD/AS model, what prevents the economy from...Ch. 24 - Suppose the U.S. Congress passes significant...Ch. 24 - Suppose concerns about the size of the federal...Ch. 24 - How would a dramatic increase in the value of the...Ch. 24 - Suppose Mexico, one of our largest trading...Ch. 24 - A policymaker claims that tax cuts led the economy...Ch. 24 - Many financial analysts and economists eagerly...
Ch. 24 - What impact would a decrease in the size of the...Ch. 24 - Suppose, after five years of sluggish growth, the...Ch. 24 - Suppose the Federal Reserve begins to Increase the...Ch. 24 - If the economy is operating in the neoclassical...Ch. 24 - If the economy is operating In the Keynesian zone...Ch. 24 - What is says law?Ch. 24 - What is Keynes; law?Ch. 24 - Do neoclassical economists believe in Keynes law...Ch. 24 - Does Says law apply more accurately in the long...Ch. 24 - What is on the horizontal axis of the AD/AS...Ch. 24 - What is the economic reason why the SRAS curve...Ch. 24 - What are the components of the aggregate demand...Ch. 24 - What are the economic reasons why the AD curve...Ch. 24 - Briefly explain the reason for the near-horizontal...Ch. 24 - Briefly explain the reason for the near-vertical...Ch. 24 - What is potential GDP?Ch. 24 - Name some factors that could cause the SRAS curve...Ch. 24 - Will the shift of SRAS to the right tend to make...Ch. 24 - What is stagflation?Ch. 24 - Name some factors that could cause AD to shift,...Ch. 24 - Would a shift of AD to the right tend to make the...Ch. 24 - How is long-term growth illustrated in an AD/AS...Ch. 24 - How is recession illustrated in an AD/AS model?Ch. 24 - How is cyclical unemployment illustrated in an...Ch. 24 - How is the natural rate of unemployment...Ch. 24 - How is pressure for inflationary price increases...Ch. 24 - What are some of the ways in which exports and...Ch. 24 - What is the Keynesian zone of the SRAS curve? How...Ch. 24 - What is the neoclassical zone of the SRAS curve?...Ch. 24 - What is the intermediate zone of the SRAS curve?...Ch. 24 - Why would an economist choose either the...Ch. 24 - On a microeconomic demand curve, a decrease in...Ch. 24 - Economists expect that as the labor market...Ch. 24 - If new government regulations require firms to use...Ch. 24 - During spring 2016 the Midwestern United States,...Ch. 24 - Hydraulic fracturing (tracking) has the potential...Ch. 24 - Some politicians have suggested tying the minimum...Ch. 24 - If households decide to save a larger portion of...Ch. 24 - If firms become more optimistic about the future...Ch. 24 - If Congress cuts taxes at the same time that...Ch. 24 - Suppose the level of structural unemployment...Ch. 24 - If foreign wealth-holders decide that the United...Ch. 24 - The AD/AS model is static. It shows a snapshot of...Ch. 24 - Explain why the short-run aggregate supply curve...Ch. 24 - Explain why the short-run aggregate supply curve...Ch. 24 - Why might it be important for policymakers to know...Ch. 24 - In your view, is the economy currently operating...Ch. 24 - Are Says law and Keynes law necessarily mutually...Ch. 24 - Review the problem in the Work It Out titled...Ch. 24 - The imaginary country of Harris Island has the...Ch. 24 - Table 24.4 describes Santhers economy. Plot the...
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Similar questions
- Suppose gold (G) and silver (S) are substitutes for each other because both serve as hedges against inflation. Suppose also that the supplies of both are fixed in the short run (Q = 90 and Q = 300) and that the demands for gold and silver are given by the following equations: PG = 990 - Qg +0.50PS and Ps = 630 -Qs +0.50PG What the the equilibrium prices of gold and silver? The equilibrium price of gold is $ 1420 and the equlibrium price of siliver is $ 1040. (Enter your responses rounded to two decimal places.) What if a new discovery of gold doubles the quantity supplied to 180? How will this discovery affect the prices of both gold and silver? The equilibrium price of gold will be $ and the equlibrium price of siliver will be $arrow_forwardIn the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen. For example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will(FALL, RISE, OR REMAIN THE SAME) , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by (REDUCING OR INCREASING) the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to (RISE ABOVE OR FALL BELOW)…arrow_forwardRefer to the graph shown. During the Reagan Administration (1981 to 1989), tax rates were reduced significantly, while federal defense spending rose by 80 percent. The effect of these policies on the AD curve is best shown as a movement from: Price level Multiple Choice O B O A to B A to C A to D. C AD1 ADO BOTOXI AD2 Real output Submiarrow_forward
- The Central Bank of Indonesia sees the potential of the latest credit card technology to facilitate transactions in the community. Then, the central bank change their regulations to decide to expand the availability of credit cards so that people have to hold less cash. If the Bank Central does not respond to this event, what will happen to the price level?arrow_forwardRefer to image; please show workarrow_forwardCarefully explain why the price level are rigid in the short run (SR). Illustrate your answer using a real world example where a price of an item may not change for months even though the raw material cost to produce that item may change.arrow_forward
- Are people necessarily worse off when the price level rises at the same rate as their income?arrow_forwardSuppose gold (G) and silver (S) are substitutes for each other because both serve as hedges against inflation. Suppose also that the supplies of both are fixed in the short run (Qe = 90 and Qg = 300) and that the demands for gold and silver are given by the following equations: PG = 990 - Qg +0.50PS and Ps = 630 - Qg +0.50PG- What the the equilibrium prices of gold and silver? The equilibrium price of gold is $ and the equlibrium price of siliver is $. (Enter your responses rounded to two decimal places.)arrow_forwardRefer to the figure to answer the following questions. Price level (P) O O B; E D; A F; E F; A LRAS D; C E A D B Based on the figure, starting at point A, if there is an increase in the price of oil, then in the short run we move to point_ and in the long run to point SRAS3 AD1 SRAS₁ SRAS2 AD2 Real GDP (Y)arrow_forward
- If households decide to save a larger portion of their income, what effect would this have on the output, employment, and price level in the short run? What about the long run?arrow_forwardThe diagram below shows various points on three aggregate demand (AD) curves. A decrease in the price level will produce a movement between which of the following two points on the diagram above? From point X to point Y From point W to point Y From point W to point Z From point Z to point Y From point Y to point Zarrow_forwardIs it possible for there to be inflation present in the economy and still witness a decline in a large number of goods? If so, how and why is this possible?arrow_forward
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