Consider the AD/AS model. An increase in government purchases will change equilibrium real GDP but have no impact on equilibrium price level if OA. the simple multiplier is very large. B. the AS curve is horizontal. OC. the AS curve is vertical. D. the simple multiplier is very small. ...

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Consider an AS AD diagram.  What would happen in the model if Energy prices increased? Group of answer choices a. AD shifts right and prices increase while real GDP increases b. AS shifts left and prices increase while real GDP decreases c. AS shifts right and prices decrease while real GDP increases d. AD shifts left and prices decreases while real GDP decreases

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What takes place when the economy reaches potential GDP and the aggregate supply becomes vertical?. The potential GDP is vertical only the traditional AD-AS model. c, The potential GDP is vertical only in both the income-expenditure model and the traditional AD-AS model. The potential GDP is vertical only in the income-expenditure model.

At an intial point on the aggregate demand curve, the price level is 100, the real GDP is $18 trillion. After the price level rises to 110, however there is an upward movement along the aggregate demand curve, and real GDP declines to $14 trillion. If total planned spending declines by $200 billion in response to the increase in the price level, what is the MPC in this economy?

Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point W. The price level is Po. Now, suppose there is an exogenous fall in the price level to P2. Which of the following statements describes the likely macroeconomic effects? O A. The AE curve shifts to AE₁, a new equilibrium is established at point V, and the AD curve shifts from AD to AD¹, and equilibrium moves from point B to point D. OB. The AE curve shifts to AE2, a new equilibrium is established at point U, and the AD curve shifts from AD to AD¹, and equilibrium from point B to point D. Ⓒ C. The AE curve shifts to AE2, a new equilibrium is established at point U, and the economy moves from point B to point C along AD. O D. The AE curve shifts to AE₁, new equilibrium is established at point V, and the economy moves from point B to point C along AD⁰. Desired Aggregate Expenditure Price Level 759² Y₁ W Yo Y₂ Real GDP AE=Y AE₂ Real GDP AEo AE₁ Q ✔ Q

Imagine an economy in which the slope of the AD curve is equal to the (negative of) slope of the AS curve. If the simple multiplier is equal to 5, what is the value of the multiplier when the price level varies? Give the number and explain how you figured it out.   im really confused with this question especially since my textbook didn't help at all

8a. Assume that an economy is at equilibrium at its potential GDP at $10 trillion and aprice level of 100. What would be the short-run impact of a significant fall in consumer confidence about the future? Provide an AD/AS model to support your answer. b. What policy would you recommend to the chairperson of the Federal Reserve? Be specific. Show the effect of this policy on your graph part a. c. What are the major goals of the Fed's monetary policy?

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