"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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Draw a short-run aggregate supply curve. Label it. As we move up along the short-run aggregate supply curve, O A. potential GDP increases OB. the money wage rate, the prices of other resources, and potential GDP remain constant OC. the money wage rate and the prices of other resources change by the same percentage OD. the real wage rate, the prices of other resources, and potential GDP remain constant 150 140- 130- 120- 110- 100- Click the graph, choose a tool in the palette and follow the instructions to create your graph. 90- Price level (GDP deflator, 2009=100) 12.0 12.5 13.0 13.5 14.0 14.5 Real GDP (trillions of 2009 dollars) >>> Draw only the objects specified in the question. WX 11.5 trend rise in velocity. Evi
f. Technological improvements increase productivity. gram to illustrate and explain how each of the following will affect the equilibrium price level and real GDP: a. Consumers expect a recession. b. Foreign income rises. c. Foreign price levels fall. d. Government spending increases. e. Workers expect higher future inflation and negotiate Use an aggregate demand and aggregate supply dia- higher wages now. In th
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Price Level O B Price Level Quantity of Output Quantity of Output Refer to the Figure 14-1. In the short run, what would result from a favourable shift in aggregate supply? O a. It would move the economy from A to B. O b. It would move the economy from B to C. Oc. It would move the economy from C to D. O d. It would move the economy from D to A.
Recall the Aggregate Demand and Aggregate Supply model, in the short-run, a reduction in businesses' costs of production make output rise and prices fall. O output fall and prices rise. O output and prices fall. output and prices rise.
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The economy is depicted in the graph to the right. a. Suppose, there are new discoveries of key raw materials. Which of the following best describes the result of this event? O A. The short-run aggregate supply curve shifts out while the long-run aggregate supply curve shifts in. OB. Both the short-run and long-run aggregate supply curves shift outward. OC. The short-run aggregate supply curve shifts inward while the long-run aggregate supply curve shifts outward. OD. Both the short and long-run aggregate supply curves shift inward. b. Complete the diagram. 1.) Using the line drawing tool, draw the new long-run aggregate supply curve representing this shock. Label it as LRAS,. 2.) Using the 3-point curved line drawing tool, draw the new SRAS representing this shock. Label it 'SRAS,'. Carefully follow the instructions above, and only draw the required objects. to search O
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Which event does not affect the long-run level of real GDP ? O The available knowledge and skills in the economy increases. O A severe hurricane destroyed factories. O The country experiences widesprcad technological advancements. O Firms and workers expect the price level to rise.
The observed correlation between the price level and real GDP may be low because O consumption is procyclical. O the central bank acts to target the price level. O money demand increases when the nominal interest rate rises. O money demand does not depend on income.