Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 12CQ
(a)
To determine
Identify the price level and quantity of GDP during the given period.
(b)
To determine
Identify if the economy is in long-run equilibrium or not.
(c)
To determine
Identify the
(d)
To determine
Identify the expected resource price and the equilibrium rate of output in the future.
(e)
To determine
Identify the expected rate of GDP during the given period.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
As you know, supply and demand shifts are caused by one of their determinants. Shifts in aggregate
demand (AD) show the effect of events on price level and Real GDP. Any event that causes a change in
consumer, business, or government spending or any change in net exports (C+l+G+Xn) will shift AD.
Any event that causes a change in production costs or increases productivity will shift aggregate
supply (AS).
Decide if the following events are Micro, shifting supply or demand, or Macro, shifting AD or AS. Give
the direction in which the graph shifts.
Demand
Situation
Aggregate
Supply
Aggregate
Demand
Supply
Sales of Atlanta Braves gear grows
with the success of the team.
1.
The President and Congress pass a
trillion dollar stimulus bill to
provide aid during recession.
2.
3.
Salmonella outbreak in peanut
processing plants threatens
lunches for school children.
4.
Pomegranates are shown to be
cancer fighting superfoods.
Value of U.S. dollars declines,
exports increase.
5.
Global oil prices…
Suppose England's economy is in long-run equilibrium. As a result of the coronavirus, the British government orders all non-essential businesses to close and issue “shutter in” and other “stay at home” directives requiring its citizens and residents not to leave their residences absent emergencies and/or to purchase food and groceries from markets (that is, people cannot, for example, go to restaurants, movies or sporting events and the like.) If so, then we would predict that in the short-run England's
A.
real GDP will fall and the price level might rise, fall, or stay the same.
B.
real GDP will rise and the price level might rise, fall, or stay the same.
C.
the price level will rise, and real GDP might rise, fall, or stay the same.
D.
the price level will fall, and real GDP might rise, fall, or stay the same
Aggregate Supply curve shows the relationship between the price level and the real GDP supplied in an economy.
Under what circumstances will the AS curve have a flat segment?
When an economy has a vertical AS curve?
The AS curve is upward sloping in the intermediate region between the horizontal and the vertical segments. What kind of macroeconomic conditions give rise to the upward sloping range?
Chapter 10 Solutions
Economics: Private and Public Choice (MindTap Course List)
Knowledge Booster
Similar questions
- Suppose the economy is initially in a long-run equilibrium. Using the AD-AS framework, show graphically what happens to output, unemployment, and the price level when there is an adverse supply shock such as a persistent increase in international oil prices due to a war in oil producing countries (think of Russia's war with Ukraine). 1. Indicate in the space provided what happens to the following variables (whether it increases, decreases or remains unchanged) in the short run after the shock occurs, and in the final long run equilibrium. Short Run Eq. Output Unemployment Price Final Long Run Eq.* *Indicate below the direction of change in the variables as the economy moves from the short run to long run equilibrium and also the final values of Y and u. Show any changes in the graph as the economy moves from short run to long run equilibrium. Output Unemployment Price Graph: (use only one graph to show the initial, short run and long run equilibrium) 2. If the government wants to…arrow_forwardSuppose the full-employment level of real output ( Q) for a hypothetical economy is $250 and the price level (P ) initially is 100. Use the short-run aggregate supply schedules below to answer the questions that follow: a. What will be the level of real output in the short run if the price level unexpectedly rises from 100 to 125 because of an increase in aggregate demand? What if the price level unexpectedly falls from 100 to 75 because of a decrease in aggregate demand? Explain each situation, using figures from the table.b. What will be the level of real output in the long run when the price level rises from 100 to 125? When it falls from 100 to 75? Explain each situation.c. Show the circumstances described in parts a and b on graph paper, and derive the long-run aggregate supply curve.arrow_forwardSuppose the economy is in a situation of moderate unemployment, and then an exogenous increase of aggregate demand occurs. (Assume the aggregate demand schedule follows the pattern set out by the mainstream story.) Use short run aggregate supply and aggregate demand analysis to discuss in detail the effects of this demand change on the price level and real GDP in the short run. Explain how the situation could change in the long run after the happenings in the first part.arrow_forward
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning