Question 71 Figure 33-5 PRICE LEVEL P LRAS R S AD₁ QUANTITY OF OUTPUT AD₁ AD₂ SRAS Refer to Figure 33-5. Suppose the economy starts at Point R. If there is a reduction in aggregate demand, then in the long run the economy moves to O a. Point P. O b. Point Q. O C. Point S. O d. Point O.

Question 71 Figure 33-5 PRICE LEVEL P LRAS R S AD₁ QUANTITY OF OUTPUT AD₁ AD₂ SRAS Refer to Figure 33-5. Suppose the economy starts at Point R. If there is a reduction in aggregate demand, then in the long run the economy moves to O a. Point P. O b. Point Q. O C. Point S. O d. Point O.

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Price level Potential output SRAS P3 PI P2 Real GDP Y1 Y3 Refer to Exhibit 10.1, which shows the short-run aggregate supply (SRAS) curve of an economy. At a price of P2, firms will O supply less than potential output. O supply more than potential output. O supply potential output. O increase prices. O decrease prices.
1
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 O C. a higher expected future price level O D. a decrease in the capital stock
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Along the long-run aggregate supply curve, the level of Real GDP supplied with increases in the price level. O does not change O increases O decreases slightly O decreases dramatically
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Consider an economy with the following aggregate demand (AD) and short-run aggregate supply (SRAS) schedules. Decision-makers have previously made decisions anticipat- ing that the price level during the current period will be p 105° a. Indicate the quantity of GDP that will be produced during the period.
Solutions for c,d and e
Question 32 Assume the economy is in short-run macro-equilibrium at E1. If the economy is allowed to self-correct on its own then: Price Level LRAS SRAS El P1 AD Real GDP Y1 Yp Da the aggregate demand curve shifts right, leading to demand-pull inflation and growth in the economy b) the short-run aggregate supply curve shifts left, leading to cost-push inflation and a decrease in real GDP Og the short-run aggregate supply curve shifts right, leading to deflation and an increase in real GDP O d) the aggregate demand curve shifts left, leading to deflation and a decrease in real GDP
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Which of the following would cause the Aggregate Supply curve to move from AS to AS2 in the graph below? A) A general increase in energy and labor cost for businesses. B) A general decrease in labor cost for businesses. C) An increase in productivity. D) A federal government increase in spending.
In the intermediate range of an aggregate supply curve an increase in total demand will O cause unemployment and deflation. cause employment to fall, but the price level to rise. increase employment, output, and the price level. O increase employment and output but not the price level.