Principles of Economics, 7th Edition (MindTap Course List)
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 33, Problem 6PA

Sub part (a):

To determine

Why short run aggregate supply curve is upward sloping.

Sub part (b):

To determine

Why short run aggregate supply curve is upward sloping.

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Assume that you live in a country that is a major importer of Russian oil. How will the Russian invasion of Ukraine and subsequent international sanctions against Russian exports affect your nation. a. What curve would shift first in an Aggregate Demand Aggregate Supply model for your country? b. How would the aggregate price level and aggregate output level change in the short run? What is this phenomenon called?
What effects would each of the following have on aggregate demand or       aggregate supply?  Justify your answer. In each case use a diagram to show the expected effects on the equilibrium price level and real output level in the economy.  Assume that all other things remain constant and prices are inflexible downward.  (a) A reduction in interest rates at each price level   (b) A sizable increase in labor productivity.   (c) The nation’s currency appreciates against its major trading partners  .
Assume that the long-run aggregate supply curve is vertical at Y= 3,000 while the short-run aggregate supply curve is horizontal at P = 1.0. The aggregate demand curve is Y = 2(MIP) and M = 1,500. ▪a. Is the economy is initially in long-run equilibrium?what are the values of P and Y? ▪b. If M increases to 2,000, what are the new short-run values of P and Y? ▪c. Once the economy adjusts to long-run equilibrium at M = 2,000, what are P and Y?
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