FIGURE 6-2 Price Level Ꭰ S Х S D Domestic Product 17. In Figure 6-2, if the aggregate demand curve shifts inward over time, the economy will a. experience inflation. b. see a sustained increase in the price level. c. experience a significant decrease in unemployment. d. experience economic recession.
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- QUESTION 48 Figure 3. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves. On the right-hand diagram, "Inf Rate" means "Inflation Rate." AS 2 B AS₁ KA A AD Y₂ Y₁ Y Refer to Figure 3. An increase in the price of oil could explain P₂ P₁ Inf Rate PC 1 PC2 a. neither the shift of the aggregate-supply curve from AS₁ to AS2 nor the shift of the Phillips curve from PC1 to PC2. b. both the shift of the aggregate-supply curve from AS₁ to AS2 and the shift of the Phillips curve from PC₁ to PC2. c. the shift of the aggregate-supply curve from AS1 to AS2, but it could not explain the shift of the Phillips curve from PC1 to PC₂. Od. the shift of the Phillips curve from PC₁ to PC2, but it could not explain the shift of the aggregate-supply curve from AS₁ to AS2.Figure 6 PRICE LEVEL LRAS 4 B Y, Y₂ QUANTITY OF OUTPUT SRAS, SRAS, AD Refer to Figure 6. Starting from point A and assuming that aggregate demand is held constant, in the long run the economy is likely to experience a a. falling price level and a falling level of output, as the economy moves to point C. b. rising price level and a falling level of output, as the economy moves to point B. c. falling price level and a rising level of output, as the economy moves to point B. d. rising price level and a rising level of output, as the economy moves to point C.R T 3. Price level B K SAS 1 SASO Real output C. an increase in aggregate demand. D. a decrease in aggregate demand. IUO Refer to the graph shown. A movement from A to C is most likely to be caused by: A. an increase in input prices. B. a decrease in input prices. NG
- 16. Why is the aggregate supply curve completely vertical in the long run? A. Short-run business cycles do not affect short-run output. B. Aggregate supply is impossible to illustrate in the long run. C. A country’s total output will always be constant. D. A country’s total output is not affected by price in the long run.PRICE LE IT. 400 420 440 460 480 500 520 540 560 580 600 REAL GDP (Billions of dollars) 100 95 90 85 80 The increase in aggregate demand from AD₁ to AD2 causes AD 1 inflation. Suppose the marginal propensity to consume (MPC) is 0.90. The government wants to avoid the double-digit inflation associated with the shift from AD₁ to AD₂. The lowest possible price level associated with full-employment output is 110. To achieve a price level of 110 and full-employment output, the government must enact a fiscal policy that reduces aggregate demand by $40 billion at each price level. To reduce aggregate demand by $40 billion, the government can government expenditures by If the government wants to use a change in tax policy instead to reduce aggregate demand by $40 billion, it should taxes byFigure 9-2 Price Level LRAS RGDP, RGDPR RGDP SRAS, SRAS AD Refer to Figure 9-2. Which of the following is indicated by a shift from SRASO) to SRAS 1? Question 23 options: cost-push inflation increasing SRAS demand-pull inflation increasing aggregate demand
- Determine whether each of the following would cause a shift in the aggregate demand curve , A shift in the aggregate supply curve, neither, or both. Which curve shifts and which direction? What happens to the aggregate output and the price levels in each case? A the price level changes. Be consumer confidence to clients. See the supply resources increase. D wage rate increases.What is the effect of an increase in the price level when the money wage rate remains unchanged? A. Aggregate supply increases. B. Potential GDP increases. C. The quantity of real GDP supplied increases. D. Resource prices increase by the same percentage as the increase in the price level.Aggregate price level P₂ P₁ Po Select one: LRAS a. P₁ - Po. b. P₂ - P. C. P₂ - Po. d. Y₁ - Yp Yp Y₁ SRAS AD The above graph shows the short run equilibrium. The size of the short run inflationary gap is equal to: Real GDP
- A change in the expected price level shiftsa.the aggregate-demand curve.b.the short-run aggregate supply-curve,but not the long- run aggregate supply-curve.c.the long-run aggregate supply-curve,but not the short- run aggregate supply-curve.d.both the short-run and the long-run aggregate supply-curveThe effect of an increase in the price level on the aggregate-demand curve is represented by a a. movement to the left along a given aggregate-demand curve. b. shift to the right of the aggregate-demand curve. c. shift to the left of the aggregate-demand curve. d. movement to the right along a given aggregate-demand curve.a decreasein the nominal wages will cause the aggregate supply curve to; a. become steeper b. become flatter c. shift outward d. shift inward