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According to the model of
a) prices to fall and output to remain unchanged.
b) prices to rise and output to remain unchanged.
c) prices to rise and output to rise
d) prices to fall and output to fall
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- According to the model of aggregate demand and supply, in the long run an increase in the money supply would cause: a) Prices and outputs to fall b) Prices to fall and outputs to rise c) Prices to rise and outputs to fall d) Prices to rise and outputs to remain unchanged e) None of the aboveThe slope and position of the long-run aggregate supply curve Suppose the Fed doubles the growth rate of the quantity of money in the economy. In the long run, the increase in money growth will change which of the following? Check all that apply. The size of the labor force The level of technological knowledge The price level The quantity of physical capitalThe advent of interest-earning checking accounts in the early 1980s led many households to keep a larger proportion of their wealth in checking accounts. Use the aggregate demand– aggregate supply model to illustrate graphically the impact in the short run and the long run of this change in money demand. Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium values; iv. the direction the curves shift; v. the short-run equilibrium values; and vi. the long-run equilibrium values. State in words what happens to prices and output in the short run and the long run.
- An increase in the money supply will cause which of the following to occur? OPTIONS: a rightward shift of the aggregate supply curve a leftward shift of the aggregate demand curve a leftward shift of the aggregate supply curve a rightward shift of the aggregate demand curveIf speculators bid up the value of the U.S. dollar in the market for foreign exchange, then U.S. goods become more expensive relative to foreign goods so aggregate demand shifts right. U.S. goods become less expensive relative to foreign goods so aggregate demand shifts right. U.S. goods become more expensive relative to foreign goods so aggregate demand shifts left. U.S. goods become less expensive relative to foreign goods so aggregate demand shifts left.If the short-run aggregate supply curve is horizontal and the long-run aggregate supply curve is vertical, then a change in the money supply will change ______ in the short run and change ______ in the long run. Group of answer choices both prices and output; only prices only output; only prices both prices and output; both prices and output only prices; only output
- Assume a country’s economy is currently in recession. Draw a correctly labeled graph of the long-run aggregate supply, short-run aggregate supply, and aggregate demand curves, and show each of the following. Current real output, labeled Y1, and current price level, labeled PL1 Full employment output, labeled Yf Identify one action the central bank can take to help the economy recover from the recession. Draw a correctly labeled graph of the money market, and show the impact of the central bank’s action identified in part (b) on the nominal interest rate. On your graph for part (a), show the effect of the central bank’s action identified in part (b) on real output and the price level. Assume there is an increase in business confidence as a result of the central bank’s action. What will happen to the demand for capital goods? Draw a correctly labeled graph of the loanable funds market, and show the effect of the change identified in part (e)(i) on the real interest…Assume a country’s economy is currently in recession. Draw a correctly labeled graph of the long-run aggregate supply, short-run aggregate supply, and aggregate demand curves, and show each of the following. Current real output, labeled Y1, and current price level, labeled PL1 Full employment output, labeled Yf Identify one action the central bank can take to help the economy recover from the recession. Draw a correctly labeled graph of the money market, and show the impact of the central bank’s action identified in part (b) on the nominal interest rate. On your graph for part (a), show the effect of the central bank’s action identified in part (b) on real output and the price level. Assume there is an increase in business confidence as a result of the central bank’s action. What will happen to the demand for capital goods? Draw a correctly labeled graph of the loanable funds market, and show the effect of the change identified in part (e)(i) on the real interest…Answer the given question with a proper explanation and step-by-step solution. Which of the following will increase both the short-run and long-run aggregate supply curves? A. There are fewer firms involved in perfectly competitive and monopolistically competitive market structures as the economy features more oligopolies than before. B. The wage rate temporarily decreases throughout the economy. C. Younger workers in the labour force receive better and more training than their predecessors. D. The supply of key raw materials, such as petroleum and bauxite, is reduced. Which of the following is true concerning shifts of the long-run aggregate supply curve? A. An increase in the long-run aggregate supply curve causes its slope to become steeper as real GDP increases. B. An increase in the long-run aggregate supply curve causes greater unemployment. C. An increase in the long-run aggregate supply curve is depicted as a rightward shift and an increase in real GDP. D. A decrease…
- the misperceptions theory of the short run aggregate supply curve says that if the price level is higher than people expected then some firms believe that the relative price of what they produce has decreased and so they increase production decreases so they decrease produciton increased so they increase production increased so they decrease productionWhich of the following does not shift the long-run aggregate supply curve to the right? Group of answer choices A) an increase in the money growth rate. B) an increase in human capital. C) an increase in capital stock. D) improved technology.Following the equation: Y = C + I + G + NX will the below examples increase or decrease the aggregate demand in Pakistan? What will be the shift in position for below situations? Widespread fear of recession (1 Mark) The appreciation in the Pakistani Rupee rate (1 Mark) A boom in the stock market (1 Mark) An increase in transfer payment (1 Mark) A decrease in real interest rate in Pakistan (1 Mark)
