Answer question 23 A Moving to another question will save this response.« < QuestionQuestion 23A favorable supply shock, such as a decrease in energy prices, is most likely to have which of the following short-run effects on the price level and output?O decrease, no effectO decrease, increaseO increase, decreaseO no effect, no effectA Moving to another question will save this response.« < Question 23

Answer: Option B (decrease, increase) Due to positive supply shock, the short-run aggregate supply…

Answered: A favorable supply shock, such as a…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 10PA

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Table 24.4 describes Santhers economy. Plot the AD/AS curves and identify the equilibrium. Would you expect unemployment in this economy to be relatively high or low? Would you expect prices to be a relatively large or small concern for this economy? Imagine that input prices fall and so AS shifts to the right by 150 units. Identify the new equilibrium. How will the shift in AS affect the original output, price level, and employment?
Suppose that the economy's long-run output level is produces accourding to the following production funciton: Y= AK^1/2L^1/2 (will attach picture of the function) and that A = 5, K = 400 and L = 100 A. What is the economic meaning of the powers of K and L? B. What is the level of output ? produced when the economy in long-run equilibrium. C. Suppose that aggregate demand in the economy is described by the following equation:Y^d = m/kP Where M is the money supply, P is the price level and k = 1/V (velocity of money). Explain carefully where this equation is derived from and its interpretation D. Suppose that M = 2000 and that k = 2. What is the price level P at which the economy is in long-run- equilibrium? Plot such an equilibrium on a diagram with P on the vertical axis and Y on the horizontal axis, by distinguishing between the short-run and the long-run equilibrium. E. Now suppose that starting from the equilibrium of (b) and (c), the Central Bank increases M to 3000. Calculate…
The economic shutdown after the Covid-19, there was a decrease in Aggregate Demand (AD) and a decrease in Aggregate Supply (AS). What was the short-run impact on real GDP? That is, what happened to the short-run equilibrium real GDP (Y)? Based on real GDP, what happened to unemployment? In the long-run equilibrium, what happens to the long-run price level?
42. Suppose that there is a temporary fall in aggregate supply due to a drought. Whathappens in the long-run?(A) Higher prices cause permanent tensions, leading long-run aggregate supply to shiftleft, resulting in a lower natural rate of output.(B) Over time, as the drought conditions fade, aggregate supply rises and returns tothe original natural rate of output.(C) Aggregate demand shifts right, so that prices are higher but long-run output isunchanged.(D) If the person you’re dating enjoys Taylor Swift, dump them immediately

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A favorable supply shock, such as a decrease in energy prices, is most likely to have which of the following short-run effects on the price level and output? O decrease, no effect decrease, increase O increase, decrease O no effect, no effect