Principles of Macroeconomics 2e
2nd Edition
ISBN: 9781947172388
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 11, Problem 20RQ
What is on the horizontal axis of the AD/AS diagram? What is on the vertical axis?
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What does it mean to graph the effects of an un anticipated increase in the price level on the AD-AS (aggregate demand/supply) graph?
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Chapter 11 Solutions
Principles of Macroeconomics 2e
Ch. 11 - Describe the mechanism by which supply creates its...Ch. 11 - Describe the mechanism by which demand creates its...Ch. 11 - The short run aggregate supply curve was...Ch. 11 - In the AD/AS model, what prevents the economy from...Ch. 11 - Suppose the U.S. Congress passes significant...Ch. 11 - Suppose concerns about the size of the federal...Ch. 11 - How would a dramatic increase in the value of the...Ch. 11 - Suppose Mexico, one of our largest trading...Ch. 11 - A policymaker claims that tax cuts led the economy...Ch. 11 - Many financial analysts and economists eagerly...
Ch. 11 - What impact would a decrease in the size of the...Ch. 11 - Suppose, after five years of sluggish growth, the...Ch. 11 - Suppose the Federal Reserve begins to Increase the...Ch. 11 - If the economy is operating in the neoclassical...Ch. 11 - If the economy is operating In the Keynesian zone...Ch. 11 - What is says law?Ch. 11 - What is Keynes; law?Ch. 11 - Do neoclassical economists believe in Keynes law...Ch. 11 - Does Says law apply more accurately in the long...Ch. 11 - What is on the horizontal axis of the AD/AS...Ch. 11 - What is the economic reason why the SRAS curve...Ch. 11 - What are the components of the aggregate demand...Ch. 11 - What are the economic reasons why the AD curve...Ch. 11 - Briefly explain the reason for the near-horizontal...Ch. 11 - Briefly explain the reason for the near-vertical...Ch. 11 - What is potential GDP?Ch. 11 - Name some factors that could cause the SRAS curve...Ch. 11 - Will the shift of SRAS to the right tend to make...Ch. 11 - What is stagflation?Ch. 11 - Name some factors that could cause AD to shift,...Ch. 11 - Would a shift of AD to the right tend to make the...Ch. 11 - How is long-term growth illustrated in an AD/AS...Ch. 11 - How is recession illustrated in an AD/AS model?Ch. 11 - How is cyclical unemployment illustrated in an...Ch. 11 - How is the natural rate of unemployment...Ch. 11 - How is pressure for inflationary price increases...Ch. 11 - What are some of the ways in which exports and...Ch. 11 - What is the Keynesian zone of the SRAS curve? How...Ch. 11 - What is the neoclassical zone of the SRAS curve?...Ch. 11 - What is the intermediate zone of the SRAS curve?...Ch. 11 - Why would an economist choose either the...Ch. 11 - On a microeconomic demand curve, a decrease in...Ch. 11 - Economists expect that as the labor market...Ch. 11 - If new government regulations require firms to use...Ch. 11 - During spring 2016 the Midwestern United States,...Ch. 11 - Hydraulic fracturing (tracking) has the potential...Ch. 11 - Some politicians have suggested tying the minimum...Ch. 11 - If households decide to save a larger portion of...Ch. 11 - If firms become more optimistic about the future...Ch. 11 - If Congress cuts taxes at the same time that...Ch. 11 - Suppose the level of structural unemployment...Ch. 11 - If foreign wealth-holders decide that the United...Ch. 11 - The AD/AS model is static. It shows a snapshot of...Ch. 11 - Explain why the short-run aggregate supply curve...Ch. 11 - Explain why the short-run aggregate supply curve...Ch. 11 - Why might it be important for policymakers to know...Ch. 11 - In your view, is the economy currently operating...Ch. 11 - Are Says law and Keynes law necessarily mutually...Ch. 11 - Review the problem in the Work It Out titled...Ch. 11 - The imaginary country of Harris Island has the...Ch. 11 - Table 24.4 describes Santhers economy. Plot the...
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Similar questions
- If foreign wealth-holders decide that the United States is the safest place to invest their savings, what would the effect be on the economy here? Show graphically using the AD/AS model.arrow_forwardWhere does GDP fit into an AD/AS model?arrow_forwardPlot the following markets on a graph: AD/AS graph: using 19.1 trillion for RGDP and 1.9% for inflation as point A (equilibrium). How will our AD/AS graph look like when Congress implements an income tax cut (Shift the appropriate AD/AS curve on the graph)?arrow_forward
- How to draw a AD/AS curve when theres an increase in prices. increase in inflation the wage of employees stays the same the demand stayed the samearrow_forwardDuring the spring of 2016 the Midwestern U.S., which has a large agricultural base, experiences above-average rainfall. Draw the AD/AS diagram, what is the effect on output, the price level, and employment?arrow_forwardA policymaker claims that tax cuts led the economy out of a recession. Can we use the AD/AS diagram to show this?arrow_forward
- What is the relationship among the AD, SRAS and LRAS curves when the economy is in macroeconomic equilibrium?arrow_forwardSuppose the U.S. Congress passes significant immigration reform that makes it more difficult for foreigners to come to the United States to work. Use the AD/AS model to explain how this would affect the equilibrium level of GDP and the price level.arrow_forwardConstruct the AD, SRAS, and LRAS curves for an economy experiencing (a) full employment, (b) an economic boom, and (c) a recession. What will happen in each case if it's only temporary? What will happen in each case if it's permanent?arrow_forward
- Why might it be important for policy makers to know which in zone of the SRAS curve the economy is?arrow_forwardIf new government regulations require firms to use a cleaner technology that is also less efficient than what they previously used, what would the effect be on output, the price level, and employment using the AD/ AS diagram?arrow_forwardThe graph below shows the AD-AS diagram for the US. How big is the inflationary gap?arrow_forward
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