Price level (GDP deflator, 2005 100)13012011010090LAS SASAD0 12.0 12.5 13.0 13.5 14.0 14.5Real GDP (trillions of 2005 dollars)In the figure above, in the short-run macroeconomic equilibrium,b.there is no structural unemployment.real GDP is greater than potential GDP.real GDP equals potential GDP.C.d. real GDP is less than potential GDP. AS₁AS₂1*1*ADPrice levelASADReal domestic output Real domestic output(A)(B)AD₂AD₁AS₂Price levelAS₁c. Cd. DASAD₁AD₂Real domestic output Real domestic output(D)(C)5. Which of the above diagrams best portrays the effects of a dramaticincrease in energy prices?a. Ab. B

Aggregate demand is the sum of consumption, investment, government spending and net export. The…

AS₁ AS₂ 1*1* AD Price level AS AD Real domestic output Real domestic output (A) (B) AD₂ AD₁ AS₂ Price level AS₁ c. C d. D AS AD₁ AD₂ Real domestic output Real domestic output (D) (C) 5. Which of the above diagrams best portrays the effects of a dramatic increase in energy prices? a. A b. B

AS₁ AS₂ 11 AD Price level AS AD Real domestic output Real domestic output (A) (B) AD₂ AD₁ AS₂ Price level AS₁ c. C d. D AS AD₁ AD₂ Real domestic output Real domestic output (D) (C) 5. Which of the above diagrams best portrays the effects of a dramatic increase in energy prices? a. A b. B

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 51CTQ: Suppose the level of structural unemployment increases. How would you illustrate the increase in...

See similar textbooks

Similar questions

When an economy is operating in a negative output gap (Recessionary Gap) which of the following must be true? a. Unemployment is less than full employment b. Employment is greater than full employment c. Employment is equal to Natural rate of unemployment d. Unemployment is greather than the Natural rate of Unemployment.
A number of macroeconomic variables decline during recessions. One of these variables is the GDP. What other variables, besides real GDP, tend to decline during recessions? Given the definition of real GDP and its components, explain the declines in these economic variables which are to be expected. Empirical studies indicate that the long-run trend in real GDP of the USA has an upward trend. How is this possible given business cycles and macroeconomic fluctuations? What factors explain the upward trend in spite of the cycles?
Give an example of a concept you think may be associated with weak macroeconomic performance. Explain why this is the case. Use real-world examples and explanations. concepts lists - economics and the economic way to thinking - economic theory - scarcity -opputunity cost - market and competitive markts -supply -how markets reach equilibrium price and quantity
There are three big issues in macroeconomics – national output, unemployment, and inflation. Briefly explain how each of these issues reflects an aspect of the economic situation for a given country, at a given time. How are GDP, unemployment, and inflation interconnected? Consider this from a Keynesian perspective.
Suppose the economy is self-regulating, the price level is 132, the quantity demanded of RealGDP is 4 trillion, the quantity supplied of Real GDP in the short run is 3.9 trillion, and thequantity supplied of Real GDP in the long run is 4.3 trillion. Is the economy in short-runequilibrium? Will the price level in long-run equilibrium be greater than, less than, or equal to132? Show the relevant graph and explain your answers.
When an economy is operating in a positive output gap (Inflationary Gap) which of the following must be true? a. Unemployment is less than full employment b. Employment is less than full employment c. Employment is equal to full employment d. Unemployment is greater than the Natural rate of Unemployment
Consumption $550 Investment $200 Exports $60 Imports $90 Government Spending $100 Taxes $70 Potential Real Output (Long run Real Output) $800 The above macroeconomic data are from the economy in 2019. Dollar values are measured in billions of 2019 dollars. (a) Is the economy facing a recessionary gap, an inflationary gap, or neither? Explain using numbers. (b) Based on your answer to part (a), how will the economy adjust in the long run in the absence of any government policy action? Explain.
Give an example of a concept you think may be associated with strong macroeconomic performance. Explain why this is the case. Use real-world examples and explanations. concepts lists - economics and the economic way to thinking - economic theory - scarcity -opputunity cost - market and competitive markts -supply -how markets reach equilibrium price and quantity
Suppose that government expenditures decrease by 12 from 20 to 8. Fill out column (3) of the Table. Find the new short-run equilibrium real GDP, inflation rate, and the growth rate of nominal wages.
Need help with this. Start with Part 1 and 2 Screenshots, both are able to be zoomed so you can see them better then answer this question/s down below: Question/s This economy experienced a contraction in the years_________(Choose one of these: 1980-1981, 1981-1985, 1986-1987 or 1987-1988). On the first graph (showing real GDP), this contraction is seen as a period in which the level of real GDP__________(Choose one of these: decreases, is negative or is below the long-term trend line). On the second graph (showing annual change in real GDP), this contraction is seen as a period in which the growth rate of real GDP________(Choose one of these: increases, decreases, is positive or is negative) . True or False: This economy was experiencing an expansion in 1981. True False In case you decided this is more than 1 question, I agree for you to do the entire thing just let me know what to do.
(1A) Typically, if consumer and business confidence is falling then ________ and if consumer and business confidence is rising then ________. (a) AD shifts to the right; AD shifts to the left(b) AD shifts to the left; AD shifts to the right(c) AD does not shift; AD shifts to the right (1B) Consider the following table and identify equilibrium GDP. If the potential GDP is at 12.0, what can you conclude about price levels and the unemployment rate? Current Price Level Real GDP-quantity demanded per trillion Real GDP-quantity supplied per trillion 120 6.0 10.0 115 8.0 8.0 110 11.0 6.0 100 13.0 5.0 (A) The economy has stable price levels and low unemployment because it is operating above the potential GDP.(B) The economy has high unemployment but experiences stable price levels because the economy operates below the potential GDP.(C) The economy is experiencing rising price levels and has a low unemployment rate because it is operating…
Macropoland, a country that is a natural gas and oil importer, has a natural rate of unemployment (at the full employment level of GDP) that is about 4.5%, and the long run average rate of inflation over time has been about 2%. However, during the period 1973-1974, the country experienced an inflation rate of about 15% while simultaneously experiencing unemployment of nearly 13%.At the present time, Macropoland is experiencing very sluggish consumption and investment (a result of a fall in the housing market), and unemployment has again edged up to around 9%. Inflation is very low at 0.4%.Macropoland has just hired you as their economic advisor. You have a big job ahead of you. Using your knowledge of aggregate demand and aggregate supply, can you explain what happened in these two time periods?Develop a response that includes examples and evidence to support your ideas, and which clearly communicates the required message to your audience. Organize your response in a clear and logical…