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Economic activity fluctuates in the short-run.
Why is this the case?
Please explain
Step by step
Solved in 2 steps with 1 images
- Are all prices in the economy equally inflexible? Which ones show large amounts of short-run flexibility?Scientists invent a new low cost solar panel able to reduce the price of producing electricity by 50% Given this improvement in technology, what will happen to the price level and output, respectively, in the long run? Rise. Fall Uncertain, Fall Uncertain, Rise Rise, Rise Fall, RiseFor an increase in output, average costs change by more in the short-run than in the long-run, but for a decrease in output, the opposite is true. True, false, or uncertain?
- Which of the figures above illustrates an economy in long-run equilibrium? A) Figure A B) Figure B C) Figure CToyota contemplating whether to increase production of SUVs based on future consumer demand. Is that micro or macro?Which of the following would cause prices to fall and real GDP to rise in the short run? A) an increase in workers' wage rate B) a decrease in the capital stock C) an increase in the quantity of labor available D) a higher interest rate
- Explain how might positive thinking help an economy expand? Demonstrate your explanation using the AD / AS graph as part of your answer.Which of the following is most commonly used to monitor short-run changes in economic activity? Answer the inflation rate real GDP aggregate demand aggregate supplyStarting from long-run equilibrium, graphically illustrate and explain what happens to RGDP, the average price level, and unemployment if consumer confidence decreases.
- In the short run, an increase in the unemployment rate is likely to be accompanied byHow does the aggregate demand and aggregate supply looks in the long run. Explain with the help of a proper graph.How would the long-run equilibrium output change if the price level fell? Decrease, Increase or No change?
