Answered: Long-run aggregate supply is the level…

Long-run aggregate supply is the level of output given by a. price stickiness b. aggregate demand c. potential output d. monetary policy

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: E. Assume that American policymakers are unwilling to wait for the long-run adjustment process to…

A: Initially the economy is below the fully employment equilibrium at Y, where SRAS1 = SRAD1 SRAS -…

Q: If the quantity of money in the economy doubled tonight, the result for the economy would be

A: If the money supply in an economy doubled it is not good for the economy.

Q: The short-run aggregate supply curve will shift up if-------. Select one: a. government spending…

A: The short-run aggregate supply curve is an upward sloping curve. While the long-run aggregates…

Q: QUESTION 3 A recession is often the result of what type(s) of economic disruption? Check all that…

A: A recession is a significant decline in economic activity that lasts for an extended period,…

Q: The economy is in long-run equilibrium when a. Aggregate demand intersects short-run aggregate…

A: When the economy is operating at potential Gross Domestic Product, the unemployment rate is at the…

Q: QUESTION 5 1. According to the quantity theory of money, a 10% increase in the quantity of money…

A: As per the quantity theory of money, the general value level of labor and products is corresponding…

Q: The aggregate-demand curve slopes downwardbecause a fall in the price level causesa. real wealth to…

A: Aggregate Demand(AD): Aggregate demand is a total demand of goods and services in a country. It…

Q: In the long run, a. the natural rate of unemployment depends primarily on the level of aggregate…

A: Philip’s curve describes the relationship between the unemployment rate and the inflation rate.…

Q: In the late 1960s, Milton Friedman and Edmund Phelps argued that a. the trade-off between…

A: Edmund Phelps and Milton Friedman separately confronted the basic concepts at the peak of the…

Q: 71. What does technological growth do to the Long Run Aggregate Supply Curve? (A) Nothing. (B)…

A: The shift of the LRAS curve A rise in the aggregate supply leads to a right shift of the LRAS…

Q: m price level will fall, and the equilibrium level of GDP will fall. B. Aggregate demand will…

A: 1. When consumers and businesses tend to have negative expectations about the future level of…

Q: If policymakers accommodate an adverse supply shock, then in the short run the unemployment rate…

A: Answer to the question is as follows :

Q: Use a labor market model with “nominal" wage to answer questions as follows: a. Assuming perfect…

A: In the model of the labor market, nominal wages are described as the wages in terms of money that…

Q: The Federal Reserve determines that the equilibrium level of output is below full employment and the…

A: The Federal reserve is the central bank of United States. The central bank regulates the activity of…

Q: Question 5 • Consider a baseline long run steady state equilibrium where output is 20 trillion…

A: Aggregate demand refers to the total demand of goods and services in an economy in a given period of…

Q: The aggregate demand curve for an economy slopes downward because a decrease in the price level…

A: An increment in abundance will prompt individuals to build their utilization. The utilization…

Q: If the economy is in long-term equilibrium and cost of energy for production increases, which of the…

A: The long-term equilibrium is determined where aggregate demand is equal to both the short-run and…

Q: Answer the attached question

A: The sustained rise in the price level of a selected basket of goods and services for a particular…

Q: If interest rates are high in the country, this will result into ___________. a. a decrease on the…

A: Interest rates and inflation rates tend to be inversely proportional. The economy expands and…

Q: An economy is initially in long-run equilibrium. Suppose an oil cartel breaks up, causing a…

A: When the oil cartel breaks up, the price of oil falls and it results in a positive supply shock.…

Q: Suppose the Australian government announces that it will bring the federal budget deficit to zero,…

Q: A favorable supply shock occurs when: unions push wages up an oil cartel breaks up and oil prices…

A: A favorable supply shock is a sudden increase in supply that causes a rightward shift of the…

Q: For each of the following events, explain the short-run and long-run effects on output and the price…

A: I will show the effect of increased spending on national defense by using the AD-AS model.…

Q: For each of the following events, explain the short-run and long-run effects on output and the price…

A: Short run is the time period when both fixed costs and variable costs are operational. In the long…

Q: Which of the following events is most responsible for the Great Recession of 2007 to 2009? Select an…

A: "Recession is a prolonged period of economic downturn." When recession occurs economic variables…

Q: Assume that the U.S. economy is currently operating in long-run equilibrium. A. Draw a correctly…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…

Q: is inflation that results from a decrease in the aggregate supply curve while the aggregate demand…

A: Inflation refers to the general increase in the all over price in an economy.

Q: . Fiscal and Monetary policy actions in the short run. Take an example 2. Changes in the AD-AS…

A: The government can use expansionary or contractionary fiscal policy to change aggregate demand.…

Q: Topic: Why the short-run aggregate supply curve slopes upward. I need help with the fills in the…

A: The short run aggregate supply curve slope upwards because as the price level increase, so profit…

Q: Rational expectations believe that a. the government must change government spending and taxes…

A: Human Beings make rational decisions. They weigh the pros and cons of all situations and then take a…

Q: Inflation targeting involves A. an information - inclusive approach in which many variables are used…

A: Inflation targeting refers to a process whereby the central bank of the country makes an…

Q: Consider an economy that is initially in its long-run equilibrium. Suppose this economy suffers a…

A: Inflation refers to the sustained increase in the general price level of goods and services in an…

Q: Consider the short run and the long run and then choose the statement that is correct. A. The…

A: The money supply is a term you may or may not be familiar with. This refers to all of the liquid…

Q: Assume that a country's economy is in short-run equilibrium and the actual unemployment rate is…

A: Note: As per the guidelines we will answer only three subparts. Please resubmit the question again…

Q: Supply shocks cause short-run aggregate supply (SRAS) to a) decrease in both the short run and the…

A: Supply shocks are kind of unanticipated events which instantaneously causes the commodity to change…

Q: If there is persistent inflation Select one: a. long-run aggregate supply is constant. b. there is…

A: The rate at which the general level of prices for goods and services in an economy rises, leading to…

Q: In the short run, there is a positive relationship between A. inflation and unemployment B.…

A: In economics, the term short run usually refers to a comparatively short time span during which…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: Option a: This option is incorrect because deflation refers to the decrease in the general price…

Q: Recent economic news includes: a. . Grocery prices falling to the lowest level since before…

A: A mixed picture of encouraging and unsettling trends can be seen in recent economic developments.…

Q: In the long run, the Central Bank can affect A.) inflation. B.) output. C.) unemployment. D.)…

A: Central Bank controls the country's banking system which is the currency regulator and controller of…

Q: hree steps: ting from long run equilibrium, show the effect of these independent events: 1. Identify…

A: The goods market is in equilibrium such that the rise in aggregate demand or rise in aggregate…

Q: in Suppose the U.S. dollar depreciates. This will cause a.aggregate demand to fall. b.aggregate…

A: Aggregate demand:Aggregate Demand is when the total number of consumers have the desire to buy…

Q: John Maynard Keynes fundamentally disagreed with Adam Smith in that according to Keynesian Theory:…

A: The theories of the economist giants smith and Keynes have been bridged apart from their school of…

Question

Long-run aggregate supply is the level of output given by

a. price stickiness

b. aggregate demand

c. potential output

d. monetary policy

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Introduction

VIEW

Analysis

VIEW

Result

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

The Federal Reserve will lower short-run output by a. decreasing the money supply. b. lowering the nominal interest rate. c. increasing the money supply. d. lowering the real interest rate.
Government stabilization policy a. can stimulate aggregate demand, but only in the long run. b. can stimulate aggregate demand and thereby induce businesses to invest, but the amount is not totally predictable. c. can stimulate aggregate demand, but investment spending will not be affected. d. cannot influence investment spending
classical economists a. argued that money supply determined aggregate demand b. believed that the quantity of money influences interest rates and real wages c. regarded monetary policy as unimportant since quantity of money does not determine price level. d. that prices would increase more than proportionate to an increase in money supply
Read the news clip, then answer the following questions. inflation when it discusses The news clip refers to rising production costs. "Rising labour productivity" can neutralize the effect on the inflation rate of "higher input costs" because A. cost-push; it increases short-run aggregate supply and long-run aggregate supply with no slowdown in aggregate demand growth OB. demand-pull; it increases aggregate demand OC. demand-pull; it increases short-run aggregate supply D. cost-push; it increases aggregate demand by more than it increases short-run aggregate supply Tight Money Won't Slay Food, Energy Inflation It's important to differentiate between a general increase in prices a situation in which aggregate demand exceeds their aggregate supply and a relative price shock. For example, a specific shock to energy prices can become generalized if producers are able to pass on the higher costs. So far, global competition has made that difficult for companies, while higher input costs have…
Question 7. Suppose there is an exogenous increase in the price of oil in an economy. a. Use the aggregate demand and supply model to illustrate and examine the impact of the oil-price increase on output, employment and the price level in both the short run and the long run. b. If the Bank of Canada cares about keeping output and employment at their natural-rate levels, what is the policy response of the Bank of Canada? What is the impact of policy response on the price level? Use the aggregate demand and supply model to explain your answer. Please illustrate the answers using figures with aggregate demand and supply curves. Please also briefly explain the answers in words.
Economics The Federal Reserve through monetary policy tools may target and reduce the a. Frictional unemployment b. Cyclical unemployment c. Structural unemployment d. Labor force integration
When identifying inputs that expand the circular flow and increase aggregate supply, economists do not include A capital B. entrepreneurship. C land . D resources . E. govemment.
In the Keynesian theory, money wages do not fall response to a decrease in aggregate demand . a. true b. false
The aggregate supply shifts to the right if: A. supplies of resources increase. B. investment increases. C. wage rates increase. D. consumption increases.
Aggregate demand increases if :Select one a. the Fed increases the required reserve .ratio .b. the government decreases taxes .c. the government decreases spending .d. the Fed sells government bonds
What does the LRAS (Long Run Aggregate Supply) represent? Potential output Full employment output The real GDP that would be produced if there is no cyclical unemployment All of the above
If there is a decrease in inflation what happens to aggregate supply. Aggregate demand would shift downwards because it would fall but would supply be affected by this? With this shift in inflation and the decrease in demand what would policy makers do in response to this?