"According to the aggregate demand and aggregate supply model, in the long run a decrease in consumption leads to" O an increase in real GDP but does not change inflation Oincreases in both inflation and real GDP Oa decrease in inflation but does not change real GDP O an increase in inflation but does not change real GDP

"According to the aggregate demand and aggregate supply model, in the long run a decrease in consumption leads to" O an increase in real GDP but does not change inflation Oincreases in both inflation and real GDP Oa decrease in inflation but does not change real GDP O an increase in inflation but does not change real GDP

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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GNen the following aggregate demand (aD) and aggregatesupply šchedult.() Price level Real Gpp Deman ded Real GDP Supplied Short-RuN 70 80 90 00 450 400 350 300 కం 40 450 500 250 550 4 the potential RGDP is 45o unets of us¢. Draw and Show the short-run economiC equilibrium and evaluate the situation comparing with the long run aggeegate suppy by ygregate (Lias) explain tHhiis sifuation. explaintis sifutión. 6)if aggregate demand increases by us$ 100. Araw and show the aew equilibrium vacues on tthe Same graph and find the Rew equilibrium po'ssible es lucrease In e bemand. GrRre te One suplancution for thus Aggregat
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A firm has fixed costs of $60 and variable costs as indicated in the table below. Complete the table. Total Total Average Average Average Total fixed variable Total fixed variable total Marginal product cost cost cost cost cost cost cost $0 1 45 2 85 3 120 4 150 5 185 6. 225 7 270 8 325 390 10 465 a. Graph total fixed cost, total variable cost, and total cost. Explain how the law of diminishing returns influences the shapes of the total variable-cost and total-cost curves. b. Graph AFC, AVC, ATC, and MC. Explain the derivation and shape of each of these four curves and their relationships to one another. Specifically, explain in nontechnical terms why the MC curve intersects both the AVC and ATC curves at their minimum points. c. Explain how the locations of each of the four curves graphed in question 7b would be altered if (1) total fixed cost had been $100 rather than $60, and (2) total variable cost had been $10 less at each level of output.
Which of the following could potentially cause a recession? O AD increases, and wages are sticky. O AD increases, and wages are flexible. O AD falls, and wages are flexible. AD decreases, and wages are sticky.
ans ences rations If in Year 1 the price level was 100 and real GDP was $20 trillion and in Year 2 the price level was 105 and real GDP was $21 billion, then the predominant change that occured in Year 2 was OA a decrease in aggregate demand. B. an increase (shift to the right) in short-run aggregate supply. OC. a decrease (shift to the left) in short-run aggregate supply OD. an increase in aggregate demand.
The figure given below shows the aggregate demand and supply curves for the U.S. According to the figure, from the beginning of period I to the end of period 2, Figure 5.1 Price level Price level Potentisloutput Petential output AS 4 2. AD AD Real CDP Real GDP 6,000 10,000 (Period 1) 6,000 10,000 (Period 2) Select one: O a real GDP fell from $10,000 to $6,000 O b. the inflation rate fell from 4 percent to 2 percent O c real GDP remained constant at $6,000 O d. real GDP decreased and then increased O e real GDP increased and then decreased
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Which of the following causes the short-run aggregate supply curve to shift to the right? O A. an increase in the expected price of an important natural resource B. a positive technological change O C. a higher expected future price level O D. a decrease in the capital stock
Which of the following government actions will shift the aggregate demand right? Select one: O O O a. a rise in personal income taxes b. closing up a military facility to reduce costs c. a repeal of an investment tax credit d. an increase in the money supply
2. The model of aggregate demand and supply represents O A. the relationship between the real Gross Domestic Product and the overall price level O B. the changes in Gross Domestic Product over time O C. the relationship between the inflation and unemployment rates O D. the changes in the price level over time
tion 6 According to aggregate supply and aggregate demand analysis, what happens to P (price level) and Q (GDP) if X increases? Oa. Prices decrease and GDP decreases. O b. Prices increase and GDP decreases. Oc Prices stay the same and so does GDP i AS and AD curves shift by the same amount O d. Prices increase and GDP increases. estion will save this response.