In the extended aggregate demand-aggregate supply model,O long-run equilibrium occurs wherever the aggregate demand curve intersects the short-runaggregate supply curve.O the long-run aggregate supply curve is horizontal.O the price level is the same regardless of the location of the aggregate demand curve.O long-run equilibrium occurs at the intersection of the aggregate demand curve, the short-runaggregate supply curve, and the long-run aggregate supply curve.

Aggregate demand refers to the overall demand level in an economy demanded by the consumers. The…

In the extended aggregate demand-aggregate supply model, O long-run equilibrium occurs wherever the aggregate demand curve intersects the short-run aggregate supply curve. O the long-run aggregate supply curve is horizontal. the price level is the same regardless of the location of the aggregate demand curve. O long-run equilibrium occurs at the intersection of the aggregate demand curve, the short-run aggregate supply curve, and the long-run aggregate supply curve.

In the extended aggregate demand-aggregate supply model, O long-run equilibrium occurs wherever the aggregate demand curve intersects the short-run aggregate supply curve. O the long-run aggregate supply curve is horizontal. the price level is the same regardless of the location of the aggregate demand curve. O long-run equilibrium occurs at the intersection of the aggregate demand curve, the short-run aggregate supply curve, and the long-run aggregate supply curve.

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter33: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 5PA

See similar textbooks

Similar questions

Which of the following would cause prices to fall and output to rise in the short run? O short-run aggregate supply shifts right short-run aggregate supply shifts left O aggregate demand shifts right aggregate demand shifts left
A price-level increase, Ceteris Paribus, will: Select one: O a. cause an upward movement along the aggregate demand curve. O b. cause a downward movement along the aggregate demand curve. O c. cause a rightward shift of the aggregate demand curve. O d. have no impact on the aggregate demand curve. O e. cause a leftward shift of the aggregate demand curve.
Suppose now the government passes a law that significantly increases the minimum wage. This change in policy will cause the natural rate of unemployment to which will: • Shift the long-run aggregate supply curve to the right O Not impact the long-run aggregate supply curve O Shift the long-run aggregate supply curve to the left Complete the following table by determining how each event impacts the position of the long-run aggregate supply (LAS) curve. Direction of LRAS Curve Shift A government-sponsored training program increases the skill level of the workforce. Many workers leave to pursue more lucrative careers in foreign economies. A scientific breakthrough significantly increases food production per acre of farmland.
Homework (Ch 20) Suppose the economy produces real GDP of $60 billion when unemployment is at its natural rate. Use the purple points (diamond symbol) to plot the economy's long-run aggregate supply (LRAS) curve on the graph. 132 128 LRAS 124 120 O PRICE LEVEL 112 108 104 100
2. The slope and position of the long-run aggregate supply curve Which of the following factors will influence the position of the long-run aggregate supply curve? Check all that apply. O The amount of available natural resources O The price level O The inflation rate O The quantity of physical capital Suppose the economy produces real GDP of $70 billion when unemployment is at its natural rate. On the following graph, use the purple line (diamond symbol) to plot the economy's long-run aggregate supply (LRAS) curve. 132 128 LRAS 124 120 116 112 108 104 100 50 60 REAL GDP (Billions of dollars) 10 20 30 40 70 80 PRICE LEVEL
In the 1970s, the price of oil was extremely high. This shock caused a O shift to the left in the aggregate demand curve. O shift to the left in the aggregate supply curve. O change in the slope of the aggregate supply curve.
Prepare a scratch paper in order to solve the following qu ions. The short run aggregate supply curve shifts leftward when costs of production increase O True False The aggregate demand curve is the total quantity of an economy's intermediate goods demanded at all price levels O True O False
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 OC. a higher expected future price level O D. a decrease in the capital stock
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
Suppose now the government passes a law that reduces unemployment benefits in a way that causes unemployed workers to seek out new jobs more quickly. This change in policy will cause the natural rate of unemployment to fall ▼ which will: O Not impact the long-run aggregate supply curve O Shift the long-run aggregate supply curve to the left O Shift the long-run aggregate supply curve to the right Complete the following table by determining how each event impacts the position of the long-run aggregate supply (LRAS) curve. An investment tax credit increases the rate at which firms acquire machinery and equipment. Many workers leave to pursue more lucrative careers in foreign economies. For environmental and safety reasons, the government requires that the country's nuclear power plants be permanently shut down. Direction of LRAS Curve Shift No shift ▼ No shift Right
In order to shift the vertical aggregate supply curve to the left, which of the following would have to occur? O expansion of potential GDP O increase in productivity flexible wage and price adjustments O breakdown of key market institutions
A period of rising prices and rising unemployment indicates that the economy has experienced * O A leftward shift of the aggregate demand curve A rightward shift of the aggregate demand curve A leftward shift of the aggregate supply curve O A rightward shift of the aggregate supply curve Figure 1 TOSHIBA