ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- Refer to the diagram that shows an AD/AS model for a hypothetical economy. Suppose the economy is in a short-run equilibrium at Y₁. An appropriate fiscal policy for attaining potential output (Y*) is a(n) O A. decrease in current imports. O B. increase in personal and corporate taxes. O C. decrease in current consumption. O D. increase in exports. Po B Y₁ Real GDP AD Garrow_forwardA decrease in the price of foreign oil will affect the U.S. economy by O a. decreasing aggregate supply. O b. increasing aggregate demand. O c. increasing aggregate supply. O d. decreasing aggregate demandarrow_forwardQuestion 6 Which of the following characteristics is NOT consistent with an upward-sloping AS curve? O when forecasted future prices increase, the AS curve shifts upward. a rise in the firms' pricing power will lead to a rise in the aggregate price. the AS curve passes through a point that corresponds to the natural level of national income and stable price. O as inflation rises output growth fallsarrow_forward
- Question Completion Status: ↳ A Moving to another question will save this response. Question 29 If the government decided to go to war on Russia, how would that impact the aggregate model? O a. This would not impact the aggregate model at all. O b. This would increase the price level which would shift the aggregate demand curve downwards. O c. It might shift the aggregate demand curve upward or to the right, and maybe shift the LRAS to the left. O d. It would shift the LRAS to the right. A Moving to another question will save this response. 1 2 # 3 4arrow_forwardIn the AS/AD Model, a decrease in the financial friction will Select one: O a. Shift the aggregate demand curve to the right. Ob. O b. Shift the aggregate supply curve to the left. Shift the aggregate supply curve to the right. O c. O d. Shift the aggregate demand curve to the left.arrow_forwardIn the figure, as the price level increases the aggregate demand curve will Price level (GDP price index, 2012 = 100) A. not shift. O B. not shift, but the aggregate demand curve will change so that it is positively sloped. O C. shift from AD, to AD, O D. shift from AD, to AD, and then back to AD,. E. shift from AD, to AD3. AD2 AD3 AD1 Real GDP (trillions of 2012 dollars)arrow_forward
- 2arrow_forwardConsider the basic AD/AS macro model in long-run equilibrium that experiences a positive AD shock. In the short run, the price level and output In the long run, the price level and output O a. Decreases; decreases; decreases further; decreases further. O b. Decreases; decreases; decreases further; returns to potential output. O c. Increases; increases; increases further; increases further. O d. Increases; decreases; increases further; returns to potential output. O e. Increases; increases; increases further; returns to potential output.arrow_forwardQuestion 1 Which of the following is not a reason for the downward slope of the aggregate demand curve? O a. Interest-rate effect O b. Net exports effect O c. Government spending effect O d. Real balances effectarrow_forward
- 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 ✔ Qarrow_forwardQuestion 4 Refer to the information provided in Figure 12.1 below to answer the questions that follow. Not yet answered Marked out of 1.00 AD P Flag question AD AD Aggregate output (Y) Figure 12.1 Refer to Figure 12.1. Suppose the economy is at Point A. A can cause a movement to Point D. Select one: O a. decrease in the price level O b. increase in the price level increase in aggregate demand O d. decrease in aggregate demand Price levelarrow_forwardConsider the basic AD/AS macro model. A rise in an input price like the price of oil would be expected to cause a new macroeconomic equilibrium in which the price level Select one: O a. is lower and real GDP higher than in the initial equilibrium. O b. and real GDP are higher than in the initial equilibrium. O c. is higher and real GDP remained the same as in the initial equilibrium. O d. is higher and real GDP lower than in the initial equilibrium. O e. and real GDP are lower than in the initial equilibrium.arrow_forward
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