ers obtain large nominal wage increases. i) the short run effect on the price level and real output and ii) the long run effect on the price level and real output iii) the total effect of the policy on the price level and real out
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Workers obtain large nominal wage increases.
i) the short run effect on the
ii) the long run effect on the price level and real output
iii) the total effect of the policy on the price level and real output
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- Government spending on Medicare payments for patient medical care decreases. i) the short run effect on the price level and real output and ii) the long run effect on the price level and real output iii) the total effect of the policy on the price level and real outputConsumer confidence in the economic outlook increases. i) the short run effect on the price level and real output and ii) the long run effect on the price level and real output iii) the total effect of the policy on the price level and real outputSuppose that your economy is in long run equilibrium. The aggregate demand and aggregate supply in the market is represented by the following functions: AD:= 360 – 4Y AS: P = 20 + 4Y Something occurs in the economy and the aggregate demand changes to: AD: P = 400 – 4Y Calculate the inflation rate that occurs with the change in aggregate demand.
- Suppose the economu is operating at less than full employment. an increase in aggregate demand will result in: A. An increase in the general price level and perhaps an increase in the general price level B. A decrease in the general price level and perhaps a decrease in aggregate demand C. An increase in aggregate output and perhaps a decrease in the general price level D. An increase in the general price level and perhaps a decrease in aggregate outputSelf-correcting mechanism reveals that Group of answer choicesreal wages will increase if there is an increase in price.nominal wages will increase if there is recessionary gap.nominal wages will fall if there is inflationary gap.in the long run economy will be in equilibrium at potential GDP.A new gasoline engine modification improves fuel economy by 25%. i) the short run effect on the price level and real output and ii) the long run effect on the price level and real output iii) the total effect of the policy on the price level and real output
- Refer to the diagram. The initial aggregate demand curve is AD1 and the initial aggregate supply curve is AS1. In the long run, the aggregate supply curve is vertical in the diagram because: A) nominal wages and other input prices are assumed to be fixed. B) real output level Qf is the potential level of output. C) price level increases produce perfectly offsetting changes in nominal wages and other input prices. D) higher than expected rates of actual inflation reduce real output only temporarily.recession overseas causes foreigners to buy fewer U.S. goods.based on the statement above, explain the short-run and long-run effects on output and the price level, assuming policymakers take no action. Analyze with graphs!Along a given short run macro aggregate supply curve a lower price level is associated with a lower amount of aggregate output because ______________________________________. Group of answer choices the aggregate supply curve is vertical in the short run wages and interest rates are relatively fixed in the short run wages change in the short run but not in the long run the interest rate is higher in the short run than in the long run
- Suppose the economy is currently in short-run equilibrium at an output below potential level of output. If there is NO government policy, what will happen in the long run? a. Nominal wages will fall, increasing output and lowering overall prices. b. Nominal wages will fall, increasing output and overall prices. c. Nominal wages will rise, decreasing output and raising overall prices. d. Nominal wages will rise, decreasing output and overall prices.Assume that nominal wages increase by 3% in the economy. As a result, we observe Question 32 options: a) a decrease in short-run aggregate quantity supplied b) an increase in short-run aggregate quantity supplied c) an increase in short-run aggregate supply d) a decrease in short-run aggregate supplythe misperceptions theory of the short run aggregate supply curve says that if the price level is higher than people expected then some firms believe that the relative price of what they produce has decreased and so they increase production decreases so they decrease produciton increased so they increase production increased so they decrease production
