Exhibit 9-6 Price Level LRAS SRAS Q, QN ReaGDP 16. Refer to Exhibit 9-6. If the economy is self-regulating and currently at point 1, what is going to happen? A- Wages rise, the SRAS curve shifts to the right until it passes through point 3; in long-run equilibrium the price level is lower and Real GDP is higher than at point 1. B- Wages fall, the SRAS curve shifts to the left until it passes through point 2; in long-run equilibrium the price level is higher and Real GDP is lower that at point 1. C- Wages fall, the SRAS curve shifts to the right until it passes through point 3; in long-run equilibrium the price level is lower and Real GDP is higher than at point 1. D- Wages rise, the AD curve shifts to the right until it passes through point 4; in long-run equilibrium the price level and Real GDP are higher than at point 1. E- Prices rise, the AD curve shifts to the right until it passes through point 4; in long-run equilibrium the price level and Real GDP are higher than at point 1.
Exhibit 9-6 Price Level LRAS SRAS Q, QN ReaGDP 16. Refer to Exhibit 9-6. If the economy is self-regulating and currently at point 1, what is going to happen? A- Wages rise, the SRAS curve shifts to the right until it passes through point 3; in long-run equilibrium the price level is lower and Real GDP is higher than at point 1. B- Wages fall, the SRAS curve shifts to the left until it passes through point 2; in long-run equilibrium the price level is higher and Real GDP is lower that at point 1. C- Wages fall, the SRAS curve shifts to the right until it passes through point 3; in long-run equilibrium the price level is lower and Real GDP is higher than at point 1. D- Wages rise, the AD curve shifts to the right until it passes through point 4; in long-run equilibrium the price level and Real GDP are higher than at point 1. E- Prices rise, the AD curve shifts to the right until it passes through point 4; in long-run equilibrium the price level and Real GDP are higher than at point 1.
Chapter11: Managing Aggregate Demand: Fiscal Policy
Section: Chapter Questions
Problem 2TY
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