en the economy is experiencing an inflationary gap, the aggregate supply curve Will shift to the right as nominal wages increase, which induces inflation and restores potential output Vill shift to the left which lowers prices and restores potential output Will shift to the left as nominal wages increase, which induces inflation and restores potential output Will not shift, as the economy will adjust to potential output in the long run

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explain what happens in the short run if the Federal Reserve raises interest rates in the economy? Assume that the economy is at full employment before the interest rate increase. Be sure to detail what happens to: aggregate demandthe price levelthe level of GDPand unemployment.  (Provide a detailed explanation of the graph provided).

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

Consider a closed economy that begins with her long run equilibrium.Recently, households become more pessimistic. They tend to save more to getprepared.Adopt the sticky-wage model of the short run aggregate supply to explain theshort run effects of this shock. Also, explain the gradual long run adjustmentsover time using the sticky-wage model of the short run aggregate supply. Assume the policymakers do not accommodate the shock.

Pls help with below homework.

Assume an ecomy operates in the intermediate range of its aggregate supply curve. State the direction of shif for the aggregate demand curve or aggregate supply curve for each of the following changes in conditions. What is the effect on the price level? On real GDP? On employment?

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.

In the medium run, if government purchases are increased and nominal money supply is decreased, we can expect that   a. the interest rate will increase while aggregate demand and prices may increase, decrease, or remain the same   b. aggregate demand and prices will increase but interest rates will not change   c. aggregate demand and interest rates will decrease but prices will increase   d. aggregate demand, prices, and the interest rate will all decrease   e. the AD-curve will shift to the right and the AS-curve will shift to the left

The figure to the right shows an economy in a short-run equilibrium at point A Using the three-point curved line drawing tool, illustrate cost-push inflation. Properly label this curve Note: Carefully follow the instructions above and only draw the required object. Which of the following is most likely to cause the cost shock that shifts the AS curve consistent with cost-push inflation? A. A surge in the price of crude oil. OB. A tax increase on households. OC. An increase in the size of government. OD. A flood of new immigrants. Price level, Pa AD₂ Yo Aggregate output (income), Y AS du