The economy has shifted and the quantity of the real GDP supplied has increased. What has potentially happened to aggregate price levels? Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper. O Potentially the price levels have decreased to a lower aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper. Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have fired some employees as labor has become too expensive.

The economy has shifted and the quantity of the real GDP supplied has increased. What has potentially happened to aggregate price levels? Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper. O Potentially the price levels have decreased to a lower aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper. Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have fired some employees as labor has become too expensive.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Price level (GDP price Index 2012-100) Pocential AS 130 GDP 120 110 100 90 AD 19.0 195 20.0 20.5 21.0 21.5 Real GDP (trillons of 2012 dollars) In the figure above, the economy is at an equilibrium with real GDP of $20 trillion and a price level of 110. As the economy moves toward its ultimate equilibrium, the curve shifts because O a. aggregate supply; leftward; the money wage rate rises O b. aggregate supply; rightward; the money wage rate falls O c. aggregate demand; leftward; the money wage rate rises d. potential GDP; leftward; the money wage rate falls O e. aggregate demand; rightward; the money wage rate falls
Which of the following causes the short-run aggregate supply curve to shift to the right? A. a positive technological change B. an increase in the expected price of an important natural resource C. a higher expected future price level D. a decrease in the capital stock Which of the following causes the short-run aggregate supply curve to shift to the left? A. an increase in the labor force B. an increase in productivity OC. an increase in the expected price of an important natural resource D. a positive technological change
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.
R The model of aggregate demand/aggregate supply... O Identifies the equilibrium GDP and price level as well as the gap between the equilibrium GDP and the potential GDP Identifies the potential GDP and price level as well as the gap between the price level and the inflation. O Identifies the equilibrium GDP the economy will reach in the long A run O Identifies the equilibrium quantity and price for consumer goods 10 % 5 T 6 O Y Com liji fa 887 & 7 7 U 8 4 f10 num lk. 8 ( 5 9 開

Explain the influence of each of the following events on the quantity of real GDP supplied and aggregate supply in India and use a graph to illustrate. A. Fuel prices rises
If real estate prices in the United States fall, this leads to A. An increase in real U.S. wealth, and an increase in AD B. A decline in real U.S. wealth, and an increase in AD C. A decline in real U.S wealth and a decrease in AD D. Both B and C
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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Price level Figure 10-7 LRAS SRAS₂ SRASO J H SRAS ADO Real GDP Refer to Figure 10-7. Starting from long-run equilibrium at point F, at which of the following points would short-run equilibrium occur following a drought in the Midwestern states? O al O b. F OC.G O d.H
An improvement in the level of technology in an economy will result in An upward movement along the aggregate supply curve An outward shift of the aggregate supply curve O A downward movement along the aggregate supply curve An inward shift of the aggregate supply curve
The long-run aggregate supply curve relates the aggregate price level to real GDP O in the short run. after factor prices are fully adjusted to eliminate output gaps. O when the wage level is not responding to the output gaps. when technology is improving the labour productivity.
“John Maynard Keynes introduced the AD-AS macroeconomic model (aggregate demand- aggregate supply) to determine the equilibrium level of real output and the level of prices in the economy” 1. Draw a diagram with aggregate demand, short-run aggregate supply, and long-run aggregate supply. 2. Discuss the reasons why the aggregate demand curve is downward sloping, while the short-run aggregate-supply curve is upward sloping?