The short-run aggregate supply curve shows:O How firms respond to changes in interest ratesO What happens to the level of real GDP suppliers are willing and able to produce in an economy as the overall price level changes, during aperiod in which output prices can change but input prices are fixedO What happens to output in an economy when the government spends more moneyO The relationship between the price level and aggregate expenditureWhich of the following are assumed to remain unchanged along a given short-run aggregate supply curve? Check all that apply.The technology available to firmsReal GDPInstitutions, such as patent laws and tax systemsInput pricesThe natural rate of unemployment refers to:O The unemployment that arises due to purely seasonal factors, such as unemployed lifeguards in the winterO The minimum possible unemployment rate of an economyO The unemployment rate that occurs when an economy's real GDP is equal to its potential outputO The unemployment rate that would occur if there were no frictional unemploymentComplete the following table by matching each definition to the appropriate economic time frame.Long RunOODefinitionA period of time in which all input prices and wages are renegotiatedA period of time in which some input prices and wages are fixedShort RunO

The short-run aggregate supply (SRAS) curve depicts how producers would modify production in…

The short-run aggregate supply curve shows: O How firms respond to changes in interest rates O What happens to the level of real GDP suppliers are willing and able to produce in an economy as the overall price level changes, during a period in which output prices can change but input prices are fixed O What happens to output in an economy when the government spends more money O The relationship between the price level and aggregate expenditure Which of the following are assumed to remain unchanged along a given short-run aggregate supply curve? Check all that apply. The technology available to firms Real GDP Institutions, such as patent laws and tax systems Input prices

The short-run aggregate supply curve shows: O How firms respond to changes in interest rates O What happens to the level of real GDP suppliers are willing and able to produce in an economy as the overall price level changes, during a period in which output prices can change but input prices are fixed O What happens to output in an economy when the government spends more money O The relationship between the price level and aggregate expenditure Which of the following are assumed to remain unchanged along a given short-run aggregate supply curve? Check all that apply. The technology available to firms Real GDP Institutions, such as patent laws and tax systems Input prices

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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How do fluctuations in aggregate demand and short-run aggregate supply bring fluctuations in real GDP around potential GDP? Starting from a full-employment equilibrium, a decrease in aggregate demand and creates gap. O A. increases real GDP above potential GDP; an inflationary OB. decreases real GDP below potential GDP; an inflationary OC. increases real GDP above potential; a recessionary O D. decreases real GDP below potential GDP; a recessionary _, short-run aggregate , and the economy returns to a full-employment In the long run, the money wage rate supply equilibrium. O A. rises; increases B. falls; decreases C. rises; decreases D. falls; increases
Suppose that Amazon decides to spend $10 million on a new distribution center. If the marginal propensity to consume is .8. then how much will GDP go up by once the multiplier process has played out? O $10 million O $20 million O $40 milion O $50 million
Which of the following shocks would plausibly shift the quantity of automobiles supplied curve to the right? O A A revolution in drone technology allows for cheap, safe, reliable and convenient personal air travel. O B. Arevolution in materials allows cars to be built to their current specifications but for half the price. O C. Universal basic income is implemented increasing notably the wealth of every physical person over the age of 18. O D. The stock market collapses, wiping out billions of dollars in pension funds and personal savings.
A decrease in the price of foreign oil will affect the U.S. economy by O a. decreasing aggregate supply. O b. increasing aggregate demand. O c. increasing aggregate supply. O d. decreasing aggregate demand
Price level (GDP price index, 2012 = 100) Potential Potential GDP, AS, GDP2 AS2 Real GDP (trillions of 2012 dollars)
How would I do c and d?
In the figure, as the price level increases the aggregate demand curve will Price level (GDP price index, 2012 = 100) A. not shift. O B. not shift, but the aggregate demand curve will change so that it is positively sloped. O C. shift from AD, to AD, O D. shift from AD, to AD, and then back to AD,. E. shift from AD, to AD3. AD2 AD3 AD1 Real GDP (trillions of 2012 dollars)
With the passage of time, which of the following will help direct this economy in Figure 10-21 toward its potential long-run rate of output (e1 to E2)? Figure 10-21 Price Level ti LRAS E₂ SRAS, SRAS: AD₂ AD₁ Y, Y₁ Goods and Services (Real GDP) Output is initially less than long-run capacity O lower interest rates that will stimulate AD and lower resource prices that will increase SRAS O higher interest rates that will reduce aggregate demand and higher resource prices that will reduce SRAS lower interest rates and higher resource prices, both of which will stimulate aggregate demand O higher interest rates that will reduce SRAS and lower resource prices that will stimulate aggregate demand
2
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 that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for every 1 percentage point fall in the real interest rate. Also assume that the economy's multiplier is 4. If household wealth falls by 6 percent because of declining house values, and the real interest rate falls by 2 percentage points, in what direction and by how much will the aggregate demand curve initially shift at each price level? In what direction and by how much will it eventually shift?
Price level LRAS AS1 Figure 12.8 C B A ASO AS₂ AD₁ ADO E Y2 Yo Y₁ Aggregate output ($ billion) AD₂ Refer to Figure 12.8. This economy cannot continue to produce Y₁ (or at point B) because O the price of raw material will increase, shifting the aggregate demand curve to AD2. O all of the above O the price of raw material and wages will increase shifting the aggregate supply curve to AS₁. O the price of inputs will decrease, shifting the aggregate supply curve to AS2.