24. If the short-run aggregate supply increases by less than the long-run aggregate supply, then, at the short-run equilibrium, A) GDP will be below potential GDP. B) aggregate demand will increase. C) GDP will be above potential GDP. D) GDP will be equal to the potential GDP
Q: Suppose the government undertook a fiscal policy by increasing government expenditure by 20 percent.…
A: Expansionary fiscal policy, sometimes known as "loose" fiscal policy, is defined as fiscal policy…
Q: Which of the following is not a use of the concept of terms of trade? Select one: a. Gains from…
A: The idea of terms of trade alludes to the connection between the costs a nation gets for its…
Q: In the Grossman model, health, H, is a variable. variable and home good, Z, is a (
A: Grossman's Model of health is a model that studies the demand for health and medical care. It seeks…
Q: Suppose a typical small open economy in a developing country is characterized by: The…
A: Banking refers to the business of accepting and safeguarding deposits, and using these deposits to…
Q: A new antitheft system incorporating MEMS technology is being separately evaluated economically by…
A: Disclaimer- “Since you have asked multiple question, we will solve the first three question for you…
Q: a. Suppose that the bank observes the efforts of entrepreneurs and makes zero profits. Explain why…
A: The bank proposes different types of loans because it wants to offer a better deal to entrepreneurs…
Q: In 1895, the first U.S. Open Golf Championship was held. The winner’s prize money was $150. In 2016,…
A: Compounded Annual Growth Rate: If an investment is growing or increases at a compounded interest…
Q: Suppose a player's true batting average is Normal, with mu = .272, and standard deviation, sigma =…
A: Probability is a mathematical concept that measures the likelihood of an event occurring within a…
Q: In the graph below, the equilibrium price level and the equilibrium real GDP are found where the two…
A: Aggregate demand and aggregate supply: The aggregate supply of an economy signifies the total…
Q: Suppose a consumer buys a frozen cheese pizza at the grocery store for $10. The frozen pizza company…
A: GDP is the gross domestic product. GDP is calculated using three methods. The value added method…
Q: True/False Marginal cost is the addition to the total cost when more unit of output is being…
A: In economics, cost is the value of the resources (such as labor, materials, and capital) used to…
Q: Quantity Price Original $ $ New Average $ Change Percentage Change Step 1: Fill in the appropriate…
A: Price elasticity of demand measures the responsiveness of demand resulting from change in price.
Q: Disequilibrium in BOP due to a persistent deficit or surplus is called as Select one: a. Secular…
A: Introduction The balance of payments (BoP), commonly referred to as the balance of…
Q: Critically evaluate the benefits and limitations of each of the different investment appraisal…
A: investment appraisal techniques Investment appraisal is the process of determining if a project is…
Q: Suppose the government undertook a fiscal policy by increasing government expenditure by 20 percent.…
A: Note: There were some calculation errors in the previously authored answers. I have corrected them…
Q: viting this editorial? Alexi and Tony own a food truck that serves only two items, street tacos and…
A: Given:- Two individuals Alexi and Tony selling two item tacos and sandwiches.Alexi output per hour…
Q: Please answer both parts I do not understand. Thank you :) Part A: Suppose that there is a 20%…
A: Expected income is a measure of the average amount of income that a person or a business can expect…
Q: 1. Micky's auto mechanic shop has a daily total cost represented by: C = 98 + 2q + 2q². Shop's…
A: The AC is the average price of goods and services. At the point when we have numerous items to sell…
Q: A multinational engineering consulting firm that wants to provide resort accommodations to special…
A: Present value (PV) is the current value of a future sum of money or stream of cash flows given a…
Q: According to Karl Marx, which was the stage of society that eventually supersedes socialism? Select…
A: Socialism is a economic and political theory that stresses on collective ownership of resources and…
Q: Consider the representative consumer who decides consumption and leisure. The preference is given by…
A: The utility function is a positive relationship between the consumption of goods and services and…
Q: . Demand & Supply: Where is equilibrium? For the demand & supply equations given, show whether…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: A small company heats its building and will spend $8,640in year 1 on natural gas for this purpose.…
A: Given: Cost of natural gas in first year = $8,640 Increase in cost of natural gas per year (g) = 8%…
Q: Which Malthus did not agree with?
A: Malthus was an economist and demographer who is best known for his argument about the relationship…
Q: In 2014, the San Francisco–Oakland–San Jose CPI was 251.985, while the Los Angeles–Riverside–Orange…
A: An increase in Consumer Price Index (CPI) is an indicator of inflation while a decrease in Consumer…
Q: Question 02: Marginal Principle: How Many Hours at the Barber Shop? The opportunity cost of your…
A: Marginal analysis is the process of examining of cost and benefit of an activity. The optimal choice…
Q: It must be answered in a maximum of five sentences only. Is being trapped within the processes and…
A: By exchanging commodities, ideas, and services, which is made possible by advances in technology and…
Q: A car costs ₱800,000, 4 years ago, and the salvage value is ₱50,000, 6 years from now. If it is to…
A: A sunk cost refers to a cost that has already been incurred and cannot be recovered. It refers to…
Q: Question 20 Hide Correct Answer Show Responses Suppose there is a negative output gap of 12 (the…
A: potential output level means that economy is producing at full capacity and beyond that production…
Q: If the demand curve shifts to the right, Which of the following is true? Price increases…
A: When there is a rise in demand while supply curve is held constant it leads to an increase in price…
Q: racey, the programs manager has hired you as a consultant to advice if she needs to ask the…
A: To calculate the Kelly's and Fisher's price index numbers for 2022, we need to first calculate the…
Q: Country B has export sales of $40 billion, government purchases of $400 billion, business investment…
A: GDP is the gross domestic product. GDP is the sum of consumption, investment, government spending…
Q: 3) Consider the given cash flow diagram. Determine the annual worth equivalence (years 1 through 5).…
A: The annual worth is the net of all the profits and expenses incurred over one year. Thus, we present…
Q: Figure 11-1 depicts three families, X, Y, and Z, and their utility based on spending on education…
A: Free public education refers to a system in which the government provides primary, secondary, and/or…
Q: Fill in the blanks. a. If one Canadian dollar equals $0.7 American, then one U.S. dollar equals $ b.…
A: Exchange rate refers to the rate at which the currency of one country is exchanged for the currency…
Q: These data were derived from a forest inventory and are to be used to calculate the best (most…
A: To calculate the best rotation (most revenue return), the manager wants to maximize the net income.…
Q: 5. Show why a $10 billion reduction in government purchases of goods and services will have a larger…
A: Aggregate Demand: Aggregate demand in an economy is the sum of private consumption expenditure (C),…
Q: Compute the interest rate if future value (FV) = $11461, present value (FV) = $3959, and number of…
A: Compound interest is the interest computed on the principal and the interest accumulated over the…
Q: Z2. RCR has decided to use the direct method and allocate variable X1 dept. costs based on the…
A: As per the question given, using the direct method of allocation of services, the costs of…
Q: (a) Calculate the size of the labor force. Show your work. (b) Calculate the labor force…
A: Given information: The actual unemployment rate is increased to 5% The natural rate of unemployment…
Q: If Z~N(0,1), then what is Pr(Z > -0.11)?
A: Given information: Z is a standard normal distribution with a mean equal to 0 and variance equal to…
Q: Complete the balancing row, in the table below. for the economy of Kaniria which is in equilibrium.…
A: Aggregate expenditure is the total expenditure incurred by the country on the final goods and…
Q: On the following graph, use the green point (triangle symbol) to plot the weekly total revenue when…
A: The total receips collected from the sale of goods at the market price is known as the total…
Q: Suppose that there are three plots of mountain resort land available for sale in Niseko and six…
A: In a market, a seller and a buyer interact and make a transaction is they both are able to gain…
Q: The subway fare in your town has just been increased from 50 cents to $1.00 per ride. As a result,…
A: Price elasticity The demand-price elasticity is a gauge of how a product's consumption changes in…
Q: Distinguish between Consumer Surplus and Producer Surplus. Draw the graphs and giv
A: Consumer surplus describes the benefit received by the consumer in the market. Producer surplus…
Q: 2-30 Bismarck Manufacturing intends to increase capac- ity through the addition of new equipment.…
A: The Break Even Point is the production level where total revenues equal total expenses. At that…
Q: Describe the concept of diminishing marginal utility while also providing an example.
A: Marginal utility is the benefit gained from consuming one additional unit of a product or service.
Q: Discuss the major tenets of neoclassical school by Alfred Marshall, JOHN GUSTAV KNUT WICKSELL,…
A: Schools of economic thought highlight a number of strategies that have been prominent enough in the…
Q: A small company wishes to set up a fund that can be used for technology purchases over the next 6…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- 26. Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo respectively, which of the following explains the adjustment towards long-run equilibrium depicted in Figure A? a) Unemployment (resulting from the short-run equilibrium being below LRAS) causes wages to decline, which increases AS until long-run equilibrium is attained at full employment level of income and a lower price level. b) Government spending is increased, increasing AD to a level sufficient to attain long-run equilibrium at full employment level of income and a higher price level. c) In attempting to produce beyond the economy's natural level of GDP, producers bid up wages and prices of other resources, causing the AS to decrease to the point where long-run equilibrium is restored. d) Taxes are increased reducing AD to a level consistent with long-run equilibrium.27. Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo respectively, which of the following explains the adjustment towards long-run equilibrium depicted in Figure C? a) Unemployment (resulting from the short-run equilibrium being below LRAS) causes wages to decline, which increases AS till long-run equilibrium is attained at full employment level of income and a lower price level. b) Government spending is increased, increasing AD to a level sufficient to attain long-run equilibrium at full employment level of income and a higher price level. c) In attempting to produce beyond the economy's natural level of GDP, producers bid up wages and prices of other resources, causing the AS to decrease to the point where long-run equilibrium is restored. d) Taxes are increased reducing AD to a level consistent with long-run equilibrium.Part (e) of the following question: Assume that a country’s economy is in long-run equilibrium. (a) Using a correctly labeled graph of aggregate demand, short-run aggregate supply, and long-run aggregate supply, show the short-run equilibrium price level, labeled PL1, and output level, labeled Y1. (b) Assume that increased uncertainty has reduced business orders for equipment. What is the impact of the change in business orders on each of the following in the short run? (i) Aggregate demand. Explain. (ii) Employment (c) Based on the change in business orders, what will happen to the long-run economic growth rate? Explain. (d) Using a correctly labeled graph of the loanable funds market, show the effect of the change in business orders on the real interest rate in the country in the short run. (e) Given the effect on the real interest rate identified in part (d), what will happen to each of the following? (i) The supply of the country’s currency on the foreign…
- Question 27 The slope of a long-run aggregate supply curve is vertical, because full-employment output depends directly on the price level. vertical, because full-employment output is independent of the price level. horizontal, because full-employment output is independent of the price level. upward sloping, because as the price level rises, firms will increase output. upward sloping, because rising prices reduce real wealth and spending. Question 28 Supposed you are offered a job with Amazon upon graduation. Your starting salary will be $70,000 which will put you in the 22% federal income tax bracket. The total amount of income taxes you pay is $11,285.50. Your average tax rate is approximately ______. 25.0% 16.1% 21.3% 13.3% 11.5% Question 30 The largest portion of the federal budget is…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.28. Assume a country's government increases taxes and its central bank increases its administered interest rates. The actions will result in an increase in which of the following in the short run? (A) Aggregate demand (B) Aggregate supply (C) Investment spending (D) Unemployment (E) Inflation
- From the diagram, identify the initial equilibrium, short-run equilibrium, and the long-run equilibrium based on the three scenarios below. In each scenario, explain your answers and identify what happened to the price level and aggregate output. Scenario 1. The economy initially in the long-run equilibrium at point A, and cost shock causes cost-pushed inflation. The government reacts by implementing expansionary fiscal policy. [Hint: Step 1: Explain how the cost shock causes disequilibrium and Step 2: What happened to the price level and aggregate output following the government intervention.] Scenario 2. The economy initially in the long-run equilibrium at point A, and an increase in government purchases causes demand-pull inflation. In the long run, wages respond to the inflation.[Hint: Step 1: Explain how the government purchases causes disequilibrium through demand-pull inflation and Step 2: What happened to the price level and aggregate output when wages in the economy respond to…Suppose firms become very optimistic about future business conditions and invest heavily in new capital equipment. a. Draw an aggregate-demand/aggregate-supply diagram to show the short-run effect of this optimism on the economy. Label the new levels of prices and real output. Explain in words why the aggregate quantity of output supplied changes. b. Now use the diagram from part (a) to show the new long-run equilibrium of the economy. (For now, assume there is no change in the long run aggregate-supply curve.) Explain in words why the aggregate quantity of output demanded changes between the short run and the long run. c. How might the investment boom affect the long run aggregate-supply curve? ExplainSuppose firms become very optimistic about future business conditions and invest heavily in new capital equipment. a. Draw an aggregate-demand/aggregate-supply diagram to show the short-run effect of this optimism on the economy. Label the new levels of prices and real output. Explain in words why the aggregate quantity of output supplied changes. b. Now use the diagram from part (a) to show the new long-run equilibrium of the economy. (For now, assume there is no change in the long run aggregate-supply curve.) Explain in words why the aggregate quantity of output demanded changes between the short run and the long run. c. How might the investment boom affect the long run aggregate-supply curve? Explain Plaese mam/sir give me answer in deatail as soon as possible please
