1-What is the general relationship between a country's price level and the quantitiy of it's domestic output (Real GDP) demanded? Who are the buyers of real US GDP?2- what assumptions cause the immediate -short-run aggregate supply curve to be horizontal? why is the long-run aggregate supply curve vertical? Explain the shape of the short-run aggregate supply curve . Why is the short-run curve relatively flat to the left of the full employment output and relatively steep to the right ?3- why does a reduction in aggregate demand tend to reduce real output, rather than the price level?4- Explain" unemployment can be caused by a decrease of aggregate demand or a decrease of aggregate supply ."In each case , specify the price level outcomes .5- In early 2001 investment spending declined in the USA. In the 2 months follwing september , 11 2001 attacks on the US, consumption also declined . Use Ad-AS analysis to show the two impacts on Real GDP.6- Using the concept of the multiplier , explain why mass layoffs by large companies like Boeing ,or General motors are a concern to the citizens and leaders where those firms are located .

Question
Asked Mar 9, 2019
481 views

1-What is the general relationship between a country's price level and the quantitiy of it's domestic output (Real GDP) demanded? Who are the buyers of real US GDP?

2- what assumptions cause the immediate -short-run aggregate supply curve to be horizontal? why is the long-run aggregate supply curve vertical? Explain the shape of the short-run aggregate supply curve . Why is the short-run curve relatively flat to the left of the full employment output and relatively steep to the right ?

3- why does a reduction in aggregate demand tend to reduce real output, rather than the price level?

4- Explain" unemployment can be caused by a decrease of aggregate demand or a decrease of aggregate supply ."In each case , specify the price level outcomes .

5- In early 2001 investment spending declined in the USA. In the 2 months follwing september , 11 2001 attacks on the US, consumption also declined . Use Ad-AS analysis to show the two impacts on Real GDP.

6- Using the concept of the multiplier , explain why mass layoffs by large companies like Boeing ,or General motors are a concern to the citizens and leaders where those firms are located .

check_circle

Expert Answer

Step 1

1-What is the general relationship between a country's price level and the quantitiy of it's domestic output (Real GDP) demanded? Who are the buyers of real US GDP?

To understand the general relationship between a country's price level and the quantity of it's domest output demanded, we see that when there is a fall in the general price level, there is an increase in the quantity of its domestic output demanded. 
The citizens are the buyers of real US GDP.

Step 2

What assumptions cause the immediate -short-run aggregate supply curve to be horizontal? why is the long-run aggregate supply curve vertical? Explain the shape of the short-run aggregate supply curve . Why is the short-run curve relatively flat to the left of the full employment output and relatively steep to the right ?

Any excess increase in supply or change in technology will lead ...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Economics

Aggregate Supply

Related Economics Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: Assume that each person produces their his/her own food as per the table below. Each person can work...

A: The term “Absolute advantage” in international trade theory measures the ability of a person, firm, ...

question_answer

Q: Hi can I get this queshtion check I think the answer is C but I'm quite unsure.

A: Negative Shocks: In economics, the negative shocks refer to the sudden spike in prices and a decreas...

question_answer

Q: The country of Freeland has an aggregate demand curve determined by the equation Freeland also has a...

A: The quantity theory of money:The quantity theory of money equation can be written as follows:

question_answer

Q: Please help with this question

A: Hi, This question is too complex to be answered on this platform. I will, however, solve Hicksian De...

question_answer

Q: Quantitative easing occurs when the A) Fed sells long-term securities. B) Fed buys long-term securit...

A: The correct option is B.

question_answer

Q: Many consider the profit motive of physicians and hospitals a moral hazard, and if patient care isn’...

A: Moral Hazards: Moral hazards refers to the situation where a person’s risk is borne by another perso...

question_answer

Q: What does the unemployment rate mean for the US economy?

A: Let us discuss certain concepts related to unemployment rate:Labor force: In an economy, labor force...

question_answer

Q: Calculate the net cumulative change in aggregate expenditure if taxes were cut by $200 billion and M...

A: Multiplier:Multiplier can be calculated as follows:

question_answer

Q: Participation #8:  After World War II, the United States was the world’s dominant economic power. W...

A: With the free and open trade,  developed economies efficiently trade the labor-intensive goods with ...