Assume that the economy is in a full employment equilibrium. There is an improvement in overall technology for all firms. The following combination of events are likely to occur   a output rises, prices fall b output falls, prices rise . c output rises, prices rise d output falls, prices fall

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Q: Consider a baseline long run equilibrium where output is 22 trillion dollars, and the price level is…

A:

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A: The main difference between market-clearing and non-market-clearing models of the economy is…

Q: Suppose that a consulting firm has generated the following information about the economy of H:

A: a. We have enough information to calculate growth rate in export.

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Q: Assume that the economy is in a full employment equilibrium. There is an increase in consumer…

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Q: full employment output occurs at QA, then the aggregate demand is

A: Option c is the right answer C)   Too great ,causing inflation gap   Explanation:-  Let's we have…

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Q: Assume that the economy is in a full employment equilibrium. There is an improvement in overa…

A: Answer: (A)

Q: Which of the following is true about Long Run Equilibrium? a. the economy is experiencing Long Run…

A: In the long-run, it can be said that an economy can be operated potentially by using all the…

Q: Suppose the economy is experiencing an inflationary gap. In the long run, if there is no government…

A: An inflationary gap is said to exist in the economy when the actual gross domestic product (GDP)…

Q: What occurs in the labor market when the real wage rate is above the​ full-employment equilibrium​…

A: When the real wage would be higher than the full employment level, there will be an excess supply of…

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Q: Discuss the effects of the event on price level, unemployment and output in the long run and short…

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Q: Suppose the economy of Hawkland is initially at full employment. Currently real GDP is $20 trillion,…

A: The graph below shows the real GDP on x-axis and price level on y-axis. The aggregate supply curve…

Q: Explain how equilibrium wages and employment change in the economy when there is an increase in the…

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Q: Long run macroeconomic equilibrium occurs when a.         aggregate demand equals short run…

A: The potential output refers to the output level that gets produced when all resources of the economy…

Q: Full employment output is the level of output that firms in the economy supply when A- all capital…

A: Full employment output refers to the output level that results from the equilibrium in the labor…

Q: If there is an increase in both the price level and employment, which of the following could…

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Q: a) Explain how equilibrium wages and employment change in the economy when there is an increase in…

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Q: Suppose that the government believes the economy is not producing goods and services at its optimal…

A: Answer is given below

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Q: How does an economic contraction that is caused by a shift in aggregate demand remedy itself over…

A: Aggregate demand (AD): - It is the total demand of goods and services in an economy at a particular…

Q: Suppose that the United States is at full employment. Explain the effect of each of the following…

A: Part A → When the union-wage settlement pushes an upward pressure in the nominal wages by 10%, this…

Q: Price Level 3. QUESTION 23 AS P2 AD Real GDP FIGURE 24-2 Refer to Figure 24-2. If the economy is…

A: * ANSWER :-  * The OPTION C ( an inflationary output gap) is correct answer. * The equilibrium point…

Q: PRICE LEVEL 125 120 115 110 105 100 95 90 85 80 75 + AS LRAS 20 0 10 30 40 70 80 90 100 50 60 OUTPUT…

A: The sticky wage hypothesis is an economic idea that describes how wages respond slowly to labour…

Q: What is the reason behind why the SRAS curve is upward sloping?     There are few unutilised…

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A: Sticky wage theory states that wages are sticky moving down which means they tend to be downward…

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Q: The position of the long-run aggregate supply curve Group of answer choices:   a. is determined by…

A: The long run aggregate supply curve is vertical, since there is no possibility of increasing output.…

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A: Answer Formula: Natural unemployment rate = structural unemployment rate + frictional unemployment…

Q: The accompanying graph illustrates an economy in long-run equilibrium which is denoted by point ELR.…

A: Long-run equilibrium refers to a state in which the short-run aggregate demand curve, short-run…