Refer to Figure 12.4. If the economy is currently at the intersection of AS and AD, stagflation would be caused by Figure 12.4 Price level Yo AD Output AS an increase in AS. an increase in AD. a decrease in AD. a decrease in AS.

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.

Since 1970, the United States has experienced 5 periods and 2 periods. O stagflationary, deflationary O inflationary; expansionary O recessionary; inflationary O recessionary; expansionary

Price Level LAS AS1 AD AS2 Real GDP Refer to the graph above to answer this question. If the economy was initially at point A, what would a movement to point B suggest? O The movement could be the result of an increase in nominal wages. The movement could be the result of an increase in prices. The movement could be the result of an increase in aggregate demand. The movement could be the result of increased government spending. The movement could be the result of a decrease in the costs of production.

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Referring to the figure, if the economy starts at point C, stagflation would be consistent with point

Figure 34-3 PRICE LEVEL a a a LRAS Y, Y₂ QUANTITY OF OUTPUT SRAS. SRAS. AD Refer to Figure 34-3. Starting from point B and assuming that aggregate demand is held constant, in the long run the economy is likely to experience a falling price level and a falling level of output, as the economy moves to point C. falling price level and a rising level of output, as the economy moves to point A. rising price level and a falling level of output, as the economy moves to point A. Orising price level and a rising level of output, as the economy moves to point C.

Question 4 Exhibit 14A-3 Macro AD-AS Model Price level CPI P3 P₂ P₁ LRAS SRAS Yp Y₁ AD Real GDP (billions of dollars per year) In Exhibit 14A-3, the level of real GDP represented by Yp: O is potential real GDP for this economy. O indicates that the economy is experiencing zero inflation. O indicates that the economy is experiencing a recessionary gap. O would be associated with considerable unemployment.

Select all that are correct

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.