Causes of the outward right shift in AS curve in the economy.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 26, Problem 1DQ

To determine

Causes of the outward right shift in AS curve in the economy.

Expert Solution & Answer

Explanation of Solution

The equilibrium in the economy is obtained at the intersection of the aggregate demand and the aggregate supply curve in the economy. When there is a decrease in the price of foreign oil in the economy, then there will be an increase in the profitability of the firm as the cost of purchase of the foreign oil decreases whereas the domestic price level remains the same. When the profit increases in the economy, then there will be an increase in the output which means that there will be a rightward shift in the AS curve in the economy. When the AS curve shifts towards the right, then there will be a decline in the price level in the economy whereas an increase in the output level in the economy which are the consequences of the shift in the AS curve.

Economics Concept Introduction

Equilibrium: The equilibrium is the point where the aggregate demand of the economy becomes equal to the aggregate supply of the economy. At this point, there will be no excess demand or excess supply in the economy and supplied products and services will be completely consumed by the consumers.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Please answer questions D-H, I have already answered A , B,C but it may help you to still solve them yourself. Thank you!

2. A firm’s production function is given by:Q = 10KLThe unit capital and labour costs are 2 and 1 pounds respectively. The firm is contracted to produce2000 units.(a) Write out the optimisation problem of the firm. (b) Express this problem using a Lagrangian function. (c) Find values of K and L which fulfil the contract with minimal cost to the firm. (d) Calculate the total cost to the firm.

3. Consider the following estimated regression equation, estimated using a sample of firms, where RDis total firm spending on research and development in USD ($), Revenue is total firm revenuein USD ($), and W ages is the firms’ total spending on wages in USD ($) (standard errors inparentheses):RDd = 1000(600)+ 0.5(0.1)Revenue + 1.5(0.5)W ages,(a) Interpret the coefficients on each of the explanatory variables. (b) Which of the three coefficients are statistically significant at the 5% level of significance? Howdo you know? A researcher runs a two-sided statistical test of the null hypothesis that both the coefficients onthe explanatory variables above are jointly equal to 0.25 (mathematically, that β1 = β2 = 0.25),and reports a p-value of 0.045.(c) What does this p-value mean for the outcome of the test? (d) What would an appropriate two-sided alternative hypothesis look like?

Answer 2

Question

Chapter 26, Problem 1DQ

To determine

Causes of the outward right shift in AS curve in the economy.

Expert Solution & Answer

Explanation of Solution

The equilibrium in the economy is obtained at the intersection of the aggregate demand and the aggregate supply curve in the economy. When there is a decrease in the price of foreign oil in the economy, then there will be an increase in the profitability of the firm as the cost of purchase of the foreign oil decreases whereas the domestic price level remains the same. When the profit increases in the economy, then there will be an increase in the output which means that there will be a rightward shift in the AS curve in the economy. When the AS curve shifts towards the right, then there will be a decline in the price level in the economy whereas an increase in the output level in the economy which are the consequences of the shift in the AS curve.

Economics Concept Introduction

Equilibrium: The equilibrium is the point where the aggregate demand of the economy becomes equal to the aggregate supply of the economy. At this point, there will be no excess demand or excess supply in the economy and supplied products and services will be completely consumed by the consumers.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 26, Problem 1DQ

To determine

Causes of the outward right shift in AS curve in the economy.

Expert Solution & Answer

Explanation of Solution

The equilibrium in the economy is obtained at the intersection of the aggregate demand and the aggregate supply curve in the economy. When there is a decrease in the price of foreign oil in the economy, then there will be an increase in the profitability of the firm as the cost of purchase of the foreign oil decreases whereas the domestic price level remains the same. When the profit increases in the economy, then there will be an increase in the output which means that there will be a rightward shift in the AS curve in the economy. When the AS curve shifts towards the right, then there will be a decline in the price level in the economy whereas an increase in the output level in the economy which are the consequences of the shift in the AS curve.

Economics Concept Introduction

Equilibrium: The equilibrium is the point where the aggregate demand of the economy becomes equal to the aggregate supply of the economy. At this point, there will be no excess demand or excess supply in the economy and supplied products and services will be completely consumed by the consumers.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 26, Problem 1DQ

To determine

Causes of the outward right shift in AS curve in the economy.

Expert Solution & Answer

Explanation of Solution

The equilibrium in the economy is obtained at the intersection of the aggregate demand and the aggregate supply curve in the economy. When there is a decrease in the price of foreign oil in the economy, then there will be an increase in the profitability of the firm as the cost of purchase of the foreign oil decreases whereas the domestic price level remains the same. When the profit increases in the economy, then there will be an increase in the output which means that there will be a rightward shift in the AS curve in the economy. When the AS curve shifts towards the right, then there will be a decline in the price level in the economy whereas an increase in the output level in the economy which are the consequences of the shift in the AS curve.

Economics Concept Introduction

Equilibrium: The equilibrium is the point where the aggregate demand of the economy becomes equal to the aggregate supply of the economy. At this point, there will be no excess demand or excess supply in the economy and supplied products and services will be completely consumed by the consumers.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 26, Problem 1DQ

To determine

Causes of the outward right shift in AS curve in the economy.

Expert Solution & Answer

Explanation of Solution

The equilibrium in the economy is obtained at the intersection of the aggregate demand and the aggregate supply curve in the economy. When there is a decrease in the price of foreign oil in the economy, then there will be an increase in the profitability of the firm as the cost of purchase of the foreign oil decreases whereas the domestic price level remains the same. When the profit increases in the economy, then there will be an increase in the output which means that there will be a rightward shift in the AS curve in the economy. When the AS curve shifts towards the right, then there will be a decline in the price level in the economy whereas an increase in the output level in the economy which are the consequences of the shift in the AS curve.

Economics Concept Introduction

Equilibrium: The equilibrium is the point where the aggregate demand of the economy becomes equal to the aggregate supply of the economy. At this point, there will be no excess demand or excess supply in the economy and supplied products and services will be completely consumed by the consumers.

Answer 6

Chapter 26, Problem 1DQ

To determine

Causes of the outward right shift in AS curve in the economy.

Expert Solution & Answer

Explanation of Solution

The equilibrium in the economy is obtained at the intersection of the aggregate demand and the aggregate supply curve in the economy. When there is a decrease in the price of foreign oil in the economy, then there will be an increase in the profitability of the firm as the cost of purchase of the foreign oil decreases whereas the domestic price level remains the same. When the profit increases in the economy, then there will be an increase in the output which means that there will be a rightward shift in the AS curve in the economy. When the AS curve shifts towards the right, then there will be a decline in the price level in the economy whereas an increase in the output level in the economy which are the consequences of the shift in the AS curve.

Economics Concept Introduction

Equilibrium: The equilibrium is the point where the aggregate demand of the economy becomes equal to the aggregate supply of the economy. At this point, there will be no excess demand or excess supply in the economy and supplied products and services will be completely consumed by the consumers.

Answer 7

Chapter 26, Problem 1DQ

To determine

Causes of the outward right shift in AS curve in the economy.

Answer 8

Expert Solution & Answer

Explanation of Solution

The equilibrium in the economy is obtained at the intersection of the aggregate demand and the aggregate supply curve in the economy. When there is a decrease in the price of foreign oil in the economy, then there will be an increase in the profitability of the firm as the cost of purchase of the foreign oil decreases whereas the domestic price level remains the same. When the profit increases in the economy, then there will be an increase in the output which means that there will be a rightward shift in the AS curve in the economy. When the AS curve shifts towards the right, then there will be a decline in the price level in the economy whereas an increase in the output level in the economy which are the consequences of the shift in the AS curve.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Equilibrium: The equilibrium is the point where the aggregate demand of the economy becomes equal to the aggregate supply of the economy. At this point, there will be no excess demand or excess supply in the economy and supplied products and services will be completely consumed by the consumers.

Answer 12

Ch. 26 - Prob. 1DQ Ch. 26 - Prob. 2DQ Ch. 26 - Prob. 3DQ Ch. 26 - Prob. 4DQ Ch. 26 - Prob. 5DQ Ch. 26 - Prob. 1TY Ch. 26 - Prob. 2TY Ch. 26 - Prob. 3TY Ch. 26 - Prob. 4TY

Causes of the outward right shift in AS curve in the economy.

Causes of the outward right shift in AS curve in the economy.

Explanation of Solution

Want to see more full solutions like this?

Chapter 26 Solutions