Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 9, Problem 2RQ
To determine
The reason for measuring short run-output in percentage rather than in dollars.
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Why do we measure short-run output Y in percentage terms rather than in dollar terms? Explain in detail please
Economic activity fluctuates in the short-run.
Why is this the case?
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labor costs by the same, or possibly more, if they
laid off fewer workers while cutting wages? Why
did few firms use this approach?
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- Question 01 Due to COVID-19 situations the oil prices fall in international market. Let’s assume that output starts at its natural level. What happens to the country A's economy (output and price) in the short run? Explain your answer using AS-AD graphs.arrow_forwardFor each of the following economic events, analyze the short-run and long-run transitions of the economy without and with government intervention. For each question, start from the initial long run equilibrium, point A. G point D, point C point E, point B SRAS Q10. There is a sudden decrease in oil price. Without government intervention, this would move the economy from point A to in the long run in the short run, then to point G, point A point G, point B AD₂arrow_forwardDue to COVID-19 situations the oil prices fall in international market. Let’s assume that output starts at its natural level. a. What happens to the Pakistan’s economy (output and price) in the short run? Explain your answer using AS-AD graphs. b. What happens to Pakistan’s economy (output and price) in the long run? Explain your answers using graphs.arrow_forward
- How does the aggregate demand and aggregate supply looks in the long run. Explain with the help of a proper graph.arrow_forwardThe long run in macroeconomics is the period of time in which prices do not change or do not change very much. True False Glick to select yeur anewerarrow_forwardEconomics The short-run equilibrium is the combination of r and Y that simultaneously satisfies the equilibrium conditions in the goods & money markets A. True B. Falsearrow_forward
- For an increase in output, average costs change by more in the short-run than in the long-run, but for a decrease in output, the opposite is true. True, false, or uncertain?arrow_forwardWhich of the following would cause an increase in the price level in the long run? Choose one:A. Natural resources increase. B. Net exports decrease. C. There is a temporary increase in the price of oil. D. Investment increases. E. The number of workers in the labor force increases.arrow_forwardStarting from long-run equilibrium, what will be the impact of a decrease in aggregate demand? It will shift the LRAS curve to the right. It will result in a higher price level. It will decrease unemployment. It will cause a recessionary gap.arrow_forward
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