Using a Short Run Aggregate Supply-Aggregate Demand diagram, what is the effect of a decrease in govemment spending on equilibrium average price level and output? O Increase in equilibrium average price level, increase in equilibrium output Decrease in equilibrium average price level, increase in equilibrium output Increase in equilibrium average price level, decrease in equilibrium output Decrease in equilibrium average price level, decrease in equilibrium output

Using a Short Run Aggregate Supply-Aggregate Demand diagram, what is the effect of a decrease in govemment spending on equilibrium average price level and output? O Increase in equilibrium average price level, increase in equilibrium output Decrease in equilibrium average price level, increase in equilibrium output Increase in equilibrium average price level, decrease in equilibrium output Decrease in equilibrium average price level, decrease in equilibrium output

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter18: Debates In Macroeconomics Over The Rolse And Effects Of Government

Section: Chapter Questions

Problem 2WNG

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Question 6 refers to the graph below. Aggregate Supply1 Aggregate Supply2 Aggregate Supply3 Aggregate Demand4 Aggregate Demands Aggregate Demand1 Aggregate Demand3 Aggregate Demand2 REAL GROSS DOMESTIC PRODUCT 25. In the graph above, crowding in is shown by which of the following shifts? (A) Aggregate Demand to Aggregate Demand4 to Aggregate Demands (B) Aggregate Demand to Aggregate Demands to Aggregate Demand4 (C) Aggregate Demand to Aggregate Demand2 to Aggregate Demand3 (D) Aggregate Demand1 to Aggregate Demand3 to Aggregate Demand2 (E) Aggregate Supply to Aggregate Supply2 toAggregate Supply3 PRICE LEVEL
To decrease output the government could adopt policies that :Select one a. increase aggregate supply and decrease .aggregate demand b. decrease aggregate supply and .aggregate demand c. decrease aggregate supply and increase .aggregate demand d. increase aggregate supply and aggregate .demand
Price Level C 8 Real GDP AS Multiple Choice AD₁ AD₂ AD₁ Refer to the figure. The economy is at equilibrium at point A. What fiscal policy would be most appropriate to control demand-pull inflation?
When does macroeconomic equilibrium occur? Multiple Choice When exports equal imports. When the aggregate supply equals the long-run Aggregate Supply When the aggregate demand equals the long-run Aggregate Supply. When the aggregate quantity demanded is equal to the aggregate quantity supplied.
Identify the word, concept, or expression most closely related to the word, concept, or expression below: 1. Short-run effect of an increased number of Canadians vacationing and shopping at home. Choose one of the following: product prices fall and output rises, product prices fall and output falls, product prices rise and output falls, product prices rise and output rises, prices remain unchanged and output rises, product rises and output remains unchanged 2. Short-run effect of increased government spending on infrastructure. Choose one of the following: product prices fall and output rises, product prices fall and output falls, product prices rise and output falls, product prices rise and output rises, prices remain unchanged and output rises, product rises and output remains unchanged 3. Short-run effect of a large increase in commodity (input) prices for businesses. Choose one of the following: product prices fall and output rises, product prices fall and output falls, product…
Real GDP Real GDPDemanded, Price Level Supplied,Billions (Price Index) Billions$100 300 $450200 250 400300 200 300400 150 200500 100 100 Use these sets of data to graph the aggregate demandand aggregate supply curves. What is the equilibriumprice level and the equilibrium level of real output inthis hypothetical economy? Is the equilibrium real output also necessarily the full-employment real output?Explain.b. Why will a price level of 150 not be an equilibriumprice level in this economy? Why not 250?c. Suppose that buyers desire to purchase $200 billion ofextra real output at each price level. Sketch in the newaggregate demand curve as AD1. What factors mightcause this change in aggregate demand? What is thenew equilibrium price level and level of real output?
In 2006, the economy of Singsville had an aggregate demand and aggregate supply according to the following schedule:Price level Aggregate Demand Short-Run Aggregate Supply100 $1445 $1085110 $1380 $1140120 $1315 $1195130 $1250 $1250140 $1185 $1305150 $1120 $1360160 $1055 $1415 What was the equilibrium price level in Singsville in 2006?
Which of the following statements concerning the aggregate demand and aggregate supply model is correct? a. The aggregate demand and aggregate supply model is nothing more than a large version of the model of market demand and supply. b. The price level and quantity of output adjust to bring aggregate demand and supply into balance. c. The aggregate supply curve shows the quantity of goods and services that households, firms, and the government want to buy at each price. d. The aggregate demand shows the quantity of goods and services that firms are willing to produce at a given price level.
Explain why the following statements are false.a. “The aggregate-demand curve slopes downwardbecause it is the horizontal sum of the demandcurves for individual goods.”b. “The long-run aggregate-supply curve is verticalbecause economic forces do not affect long-runaggregate supply.”
Illustrate 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.
If the government got rid of sales tax, how might this affect the market? shift AD to the right shift SRAS to the right shift AD to the left shift SRAS to the left
A change in which of the following variables will have NO direct effect on domestic demand?domestic incomegovernment spendingtaxesthe interest rate (r)none of the above