Assume that the stock market increases by 5% this month. As a result Question 6 options: a) the aggregate demand curve shifts right b) the aggregate demand curve shifts left c) the short-run aggregate supply curve shifts right d) the short-run aggregate supply curve shifts left
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Q: What effects would each of the following have on aggregate demand or aggregate supply, other things…
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Q: In answering the question, you should emphasize the line of reasoning that generated your results;…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
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A: A long-run aggregate supply curve is vertical at the level of production the economy can produce…
Q: Determine whether the events below will cause the aggregate demand curve to shift to the left or to…
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- Assume that (a) the price level is flexible upward but not downward and (b) the economy is currently operating at its full-employment output. Other things equal, how will each of the following affect the equilibrium price level and equilibrium level of real output in the short run?a. An increase in aggregate demand.b. A decrease in aggregate supply, with no change in aggregate demand.c. Equal increases in aggregate demand and aggregate supply.d. A decrease in aggregate demand.e. An increase in aggregate demand that exceeds an increase in aggregate supply.Assume that aggregate demand is unaffected by the gas tax holiday. After the economy has fully adjusted to the gas tax holiday, the long-run effect is (an increase, no change, a decrease) in aggregate output and (an increase, no change, a decrease) in the price level.27. Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo respectively, which of the following explains the adjustment towards long-run equilibrium depicted in Figure C? a) Unemployment (resulting from the short-run equilibrium being below LRAS) causes wages to decline, which increases AS till long-run equilibrium is attained at full employment level of income and a lower price level. b) Government spending is increased, increasing AD to a level sufficient to attain long-run equilibrium at full employment level of income and a higher price level. c) In attempting to produce beyond the economy's natural level of GDP, producers bid up wages and prices of other resources, causing the AS to decrease to the point where long-run equilibrium is restored. d) Taxes are increased reducing AD to a level consistent with long-run equilibrium.
- Aggregate demand shifts left if a. government purchases decrease and shifts left if stock prices rise. b. government purchases increase and shifts left if stock prices fall. c. government purchases increase and shifts left if stock prices rise. d. government purchases decrease and shifts left is stock prices fall.The figure given below represents the equilibrium real GDP and price level in the aggregate demand and aggregate supply model. Suppose that AD and ASp represent the initial aggregate demand and aggregate supply in the economy. Figure 18 Refer to Figure 18. Movement of equilibrium from point D to point B could be initiated by: A) a stock market crash that undermines consumer confidence. B) a tax code changes that negatively affect investor expectations. C) a sharp decrease in government spending. D) a higher net exports because of economic expansion in European countries. E) a technological advancement.Assume the economy of Germany is in a long run equilibrium with full employment. Draw a correctly labeled graph of short run aggregate supply, long run aggregate supply, and aggregate demand. Show each of the following Equilibrium output, labeled Y1. Equilibrium price level, labeled PL1 2. Suppose that there is a significant boom in the German stock market, causing all stocks to increase in value by 15%. On your graph in part A, show the effect this will have on the equilibrium in the short run, labeling the new equilibrium output and price level Y2 and PL2, respectively. 3. Using a correctly labeled graph of the Phillips Curve, show how this change will affect the economy. 4. What two fiscal policy options does the federal government have to fix the market imbalance? Explain how each would affect the economy.
- Q. 4 For each of the following statements , show graphically and explain the expected effets of the equilibrium price and output for aggregate demand and aggregate supply , other things remaining constant . a . An appreciation in currency. b . An increase in price of non - labor inputs. C. A decrease in real wage rates.Assume that (a)the price level is flexible upward but not downward and (b) the economy iscurrently operating at its full-employment output. Other things equal, how willeach of the following affect the equilibrium price level and equilibrium levelof real output in the short run?· An increase in aggregate demand.· A decrease in aggregate supply, with no change in aggregatedemand.· Equal increases in aggregate demand and aggregate supply.· A decrease in aggregate demand.· An increase in aggregate demand that exceeds an increase inaggregate supply.Q22 Suppose that the money prices of raw materials increase so that short-run aggregate supply decreases. If the SARB does not respond, the higher money price of raw materials will.; I. repeatedly shift the aggregate demand curve rightward and raise the price level.; II. shift the aggregate demand curve rightward and the aggregate supply curve leftward, raising prices., III. result initially in lower employment and a higher price level. Select one: a. I only b. III only c. both I and II d. both II and III
- 26. Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo respectively, which of the following explains the adjustment towards long-run equilibrium depicted in Figure A? a) Unemployment (resulting from the short-run equilibrium being below LRAS) causes wages to decline, which increases AS until long-run equilibrium is attained at full employment level of income and a lower price level. b) Government spending is increased, increasing AD to a level sufficient to attain long-run equilibrium at full employment level of income and a higher price level. c) In attempting to produce beyond the economy's natural level of GDP, producers bid up wages and prices of other resources, causing the AS to decrease to the point where long-run equilibrium is restored. d) Taxes are increased reducing AD to a level consistent with long-run equilibrium.Question #4. Individual income taxes directly affect personal disposable incomes which in turn affect the domestic demand for goods and services. Production costs depend substantially on oil prices. Market expectations are: (1) income taxes in the U.S. will INCREASE substantially and (2) oil prices will remain relatively unchanged. Using market expectations, what do you expect the U.S. output and prices in the coming years? Assume we are moving from the old equilibrium to a new equilibrium. Please state clearly your assumptions and include a graph to support your answer.Question 27 The slope of a long-run aggregate supply curve is vertical, because full-employment output depends directly on the price level. vertical, because full-employment output is independent of the price level. horizontal, because full-employment output is independent of the price level. upward sloping, because as the price level rises, firms will increase output. upward sloping, because rising prices reduce real wealth and spending. Question 28 Supposed you are offered a job with Amazon upon graduation. Your starting salary will be $70,000 which will put you in the 22% federal income tax bracket. The total amount of income taxes you pay is $11,285.50. Your average tax rate is approximately ______. 25.0% 16.1% 21.3% 13.3% 11.5% Question 30 The largest portion of the federal budget is…