Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 33.4, Problem 4QQ
Sub part (a):
To determine
Why long-run aggregate supply curve is vertical.
Sub part (b):
To determine
Why long-run aggregate supply curve is vertical.
Sub part (c):
To determine
Why long-run aggregate supply curve is vertical.
Sub part (d):
To determine
Why long-run aggregate supply curve is vertical.
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4.1 Why does the short-run aggregate supply curve slope upward?
4.2 Explain why the long-run aggregate supply curve is vertical. Then, (verbally and
graphically) explain how each of the following events would affect the long-run
aggregate supply curve.
a. A lower price levels
b. A decrease in the labor force
c.
A decrease in the quantity of capital goods
d.
Technological change
Chapter 33 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
Ch. 33.1 - Prob. 1QQCh. 33.2 - Prob. 2QQCh. 33.3 - Prob. 3QQCh. 33.4 - Prob. 4QQCh. 33.5 - Prob. 5QQCh. 33 - Prob. 1QRCh. 33 - Prob. 2QRCh. 33 - Prob. 3QRCh. 33 - Prob. 4QRCh. 33 - Prob. 5QR
Ch. 33 - Prob. 6QRCh. 33 - Prob. 7QRCh. 33 - Prob. 1QCMCCh. 33 - Prob. 2QCMCCh. 33 - Prob. 3QCMCCh. 33 - Prob. 4QCMCCh. 33 - Prob. 5QCMCCh. 33 - Prob. 6QCMCCh. 33 - Prob. 1PACh. 33 - Prob. 2PACh. 33 - Prob. 3PACh. 33 - Prob. 4PACh. 33 - Prob. 5PACh. 33 - Prob. 6PACh. 33 - Prob. 7PACh. 33 - Prob. 8PACh. 33 - Prob. 9PACh. 33 - Prob. 10PA
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- 6. Why the aggregate supply curve slopes upward in the short run In the short run, the quantity of output supplied by firms can deviate from the natural level of output if the actual price level deviates from the expected price level in the economy. A number of theories explain reasons why this might happen. For example, the sticky-price theory asserts that the output prices of some goods and services adjust slowly to changes in the price level. Suppose firms announce the prices for their products in advance, based on an expected price level of 100 for the coming year. Many of the firms sell their goods through catalogs and face high costs of reprinting if they change prices. The actual price level turns out to be 90. Faced with high menu costs, the firms that rely on catalog sales choose not to adjust their prices. Sales from catalogs will ▼, and firms that rely on catalogs will respond by ▼ the quantity of output they supply. If enough firms face high costs of adjusting prices, the…arrow_forwardWhich of the following would cause prices to fall and output to rise in the short run? O short-run aggregate supply shifts right short-run aggregate supply shifts left O aggregate demand shifts right aggregate demand shifts leftarrow_forwardResources O Hint Check Answer 18 of 27 > The Great Depression of the 1930's and the Great Recession from 2007 to 2009 are two major economic downturns in U.S. history. Classify each characteristic according to the downturn that it describes. The Great Depression The Great Recession It is thought to have resulted from reductions in both aggregate demand and aggregate supply. The unemployment rate peaked at just over 25%. It is thought to have resulted from reductions primarily in aggregate demand. The biggest annual decline in real GDP was 3.4%. The biggest annual decline in real GDP was 26.5%m The unemployment rate peaked at just over 10%. Policy makers used innovative strategies to increase the money supply. Answer Bankarrow_forward
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