Q: If the short-run aggregate supply curve intersects the aggregate demand curve to the right of…
A: The potential level of GDP is the level which can be achieved by the economy through the efficient…
Q: At very low price levels there is a low level of production. Since increases in price levels…
A: Production refers to the process of converting and assembling raw materials into finished goods that…
Q: Starting with a short run and long run equilibrium, assume a war breaks out, then," a.government…
A: Short-run equilibrium occurs at the intersection point of the short-run aggregate supply (SRAS) and…
Q: A long-run equilibrium occurs when aggregate demand and aggregate supply are in equilibrium ____ a)…
A: In the long run, the actual GDP of an economy and the associated price levels are determined by…
Q: Europe and Asia both fall into deep economic recessions. What impact will this have on U.S.…
A: Aggregate demand refers to the amount of sales proceeds which an entrepreneur actually expects from…
Q: An adverse or negative supply shock causes the aggregate __________ curve to shift to the…
A: Unexplained shocks that occur in the supply chain result in a sudden increase in cost or damage to…
Q: Which of the following would cause the aggregate price level to fall and the equilibrium level of…
A: Both aggregate demand and supply will cause the change in price level and real GDP in the short run.…
Q: True or false The aggregate supply curve is vertical in the long run at the full-employment level…
A: According to the given question Answer is TRUE
Q: A decrease in government spending will decrease aggregate demand (AD) and cause prices to decrease…
A: Aggregate demand is the composition of consumption, investment, government spending, and net…
Q: In the upward-sloping segment of the aggregate supply curve, a. producers can hire more workers…
A: The aggregate supply is total supply by all producers. The supply slopes upward signifying positive…
Q: Assume that the stock market increases by 5% this month. As a result Question 6 options: a)…
A: Stock market increases by 5% means that value of people's wealth rises.
Q: A supply shock might lead to stagflation, if it shifts the short-run aggregate supply curve to the…
A: Aggregate supply refers to the total amount of all the goods and services supplied in an economy…
Q: In 1998, the economy of Aptonville had an aggregate demand and aggregate supply according to the…
A: In an economy, the equilibrium level of general price if the one at which aggregate supply equates…
Q: Assume that the housing market is in equilibrium in year 1. In year 2, the mortgage rate that banks…
A: Mortgage loan: It refers to the loan which is given by the banks to the people for purchasing…
Q: When the aggregate supply curve is price of factors of production is fixed, with little or no upward…
A: Aggregate supply curve represents the total supply of goods and services by all firms in an…
Q: Suppose firms become very optimistic about future business conditions and invest heavily in new…
A: If firms become very optimistic about future business conditions and invest heavily in new capital…
Q: an increase in the price level cause the aggregate supply curve to shiftto anotherupply schedule.…
A: We are going to use AD-AS dynamics to answer this question.
Q: The aggregate supply curve is probably better thought of as a price/output response curve. Select…
A: Aggregate supply refers to the total value of goods and services available for purchase at a…
Q: When aggregate supply curve shifts to the right because oil prices are decreasing, then: Group of…
A: In AD/AS diagram a shift in Aggregate Supply curve to the right will result in price level to fall…
Q: If policymakers decrease aggregate demand, then in the short run the price level Answer falls and…
A: Aggregate demand is the sum of the demand for current output by each of the buying sectors of the…
Q: In a time of crisis where there is a pandemic, policymakers try to encourage economic activity by…
A: During pandemic situation , alomost every nation have been affected by the covid-19 and the…
Q: If there is a temporary decrease in Aggregate Supply due to supply chain problems, • Prices will…
A: In this model the AD (aggregate demand) expresses the equilibrium in the goods and the money market.…
Q: Which of the following events will not cause a supply shock that would shift the aggregate supply…
A: A supply shock is any event or calamity which leads to a reduction in the aggregate supply of the…
Q: An increase in resources available would decrease potential GDP and the long-run aggregate supply…
A: The goods and services are produced with the help of the resources available in the economy. The…
Q: If policymakers decrease aggregate demand, then in the short run the price level falls and…
A: The aggregate demand refers to the total amount of goods and services demanded in an economy that…
Q: What effect will each shift have on price levels and quantities? Decrease in Aggregate Demand…
A: Aggregate demand shows the total quantity of goods and services demanded at different price levels.…
Q: Derive the dynamic aggregate supply and dynamic aggregate demand curves. What is the role of…
A: Aggregate demand refers to the total demand of final goods and services in the economy where goods…
Q: Which of the following is most commonly used to monitor short-run changes in economic activity?…
A: Economic activity refers to those activity which leads to production in the economy.
Q: In a time of crisis where there is a pandemic, policymakers try to encourage economic activity by…
A: The use of government spending and tax strategies to impact economic conditions, particularly…
Q: Which of the following is likely to occur if an increase in legal immigrants significantly reduces…
A: Answer: B. Aggregate supply will increase (shift right) Explanation: If an increase in legal…
Q: aggregate price level and aggregate output Severe weather in Mpumalanga and Limpopo in January 2021…
A: Aggregate supply is a macroeconomic concept that helps in determining the total number of quantity…
Q: "The oil price run - up of 2007 - 08 was caused by strong demand confronting stagnating world…
A: If the oil price rises, then the cost of production will increase. Therefore, the supply of…
Q: Since an increase in inflation reduces planned spending and short-run equilibrium output: the…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: 1)Potential output is the same as long-run aggregate supply. Select one: True False
A: Hey, Thank you for the question. According to our policy, we can only answer 1 question per session.…
Q: Oil price shocks have been a reoccurring phenomenon over the last fifty years, causing significant…
A: AD-AS model: The AD-AS framework illustrates national wage determination and price level…
Q: If aggregate demand shifts right then in the short run Group of answer…
A: Firms increase (decrease) production if price level is higher (lower).
Q: The oil price increase in 2007-08 was a negative supply shock. Would you define it as a temporary or…
A: Answer: Given that: The oil price increase in 2007-08 was a negative supply shock. Would you…
Q: In March 2020, as the Covid-19 recession hit the world, consumers became pessimistic about their…
A: The gross domestic product(GDP) is defined as the market value of all the final commodities(goods…
Q: When production costs rise, in the short run: A. the aggregate-supply curve shifts down to…
A: The aggregate supply (AS) the sum total amount of commodities and services produced in an economy at…
Q: When foreigners' preferences for US goods fall: Drag and drop options on the right-hand side and…
A: 1) Effect on aggregate demand When foreigners' preferences for US goods fall, then they will buy…
Q: Imagine that in the current year the economy is in long-run equilibrium. Then the federal government…
A: Government purchases is a component of aggregate demand and decrease in goverment purchases results…
Q: How would the long-run equilibrium output change if the price level fell? Decrease, Increase or No…
A: The aggregate supply is the total amount of services and commodities that firms in an economic plan…
Q: Draw Aggregate Demand, Short Run Aggregate Supply, and Long Run Aggregate Supply as if an economy is…
A: The economy is in short run equilibrium where aggregate demand intersects short run aggregate supply…
Q: Identify three positive demand shocks that would increase aggregate demand and three negative demand…
A: NOTE: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Assume that aggregate demand is unaffected by the gas tax holiday. After the economy has fully…
A: Due to the gas tax holiday, in the longrun, the aggregate demand curve will not be affected and a…
Q: A supply shock, such as the development of a new technology, production costs and shifts the short…
A: The Law of supply refers to the direct or positive relationship between the quantity supplied of a…
Q: A negative supply shock causes output to _____ and the price level to _____.
A: Negative supply shock refer to unexpected event that cause leftward shift in supply curve. This is…
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- An increase in the price level causes the aggregate supply curve to shift to another supply schedule. True or FalseAn increase in resources available would decrease potential GDP and the long-run aggregate supply curve. True or FalseThe aggregate supply curve is probably better thought of as a price/output response curve. Select one: True False
- If there is a temporary decrease in Aggregate Supply due to supply chain problems, • Prices will fall and output will rise • Prices will rise and output will fall • Prices and output will rise • Prices and output will fall.Unemployment would decrease and prices would increase if a. aggregate supply shifted left. b. aggregate demand shifted right. c. aggregate supply shifted right. d. aggregate demand shifted left.A long-run equilibrium occurs when aggregate demand and aggregate supply are in equilibrium ____ a) below potential output b) at potential output c) above potential output d) at any level of output
- If aggregate supply is vertical, then which of the following statements must be true? Aggregate demand does not affect the quantity of output. Inflation creates greater social benefits. Inflation will accompany any rise in output. Aggregate demand does not cause inflationary changes in price level.A supply shock might lead to stagflation, if it shifts the short-run aggregate supply curve to the right, causing an increase in the price level and a decrease in real GDP. Select one: True Falseexplain how generation dispatch in a competitive market causes the aggregate supply curve to reflect the so called merit order
- Due to a shift in the aggregate supply curve output and price level move in __________ directions: either output increases and the price level decreases or output decreases and the price level increases.An adverse or negative supply shock causes the aggregate __________ curve to shift to the ______________. Select one: a. demand; left b. supply; left c. demand; right d. supply; rightWhich of the following is likely to occur if an increase in legal immigrants significantly reduces the wages of workers, Cerberus paribus? A) Aggregate supply will decrease B) Aggregate supply with increase C) Aggregate demand will increase D) Aggregate demand will decrease
