Home heating oil prices rise, so people switch to natural gas. e. f. The U.S. price level rises as expected.

Q: The imaginary country of Harris Island has the aggregate supply and aggregate demand curves as Table…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Expectations of higher future prices cause firms to lower prices today to sell their product before…

A: Expectation of future price is one of the factor that determines the supply of a product in the…

Q: In 1986, OPEC countries increased their production of oil. This caused   the price level to rise.…

A: Since, oil production has increased, it will tend to have positive effects.

Q: Determinants of Demand include the following:     (a) Changes in supply     (b) Prices of goods…

A: Demand refers to the quantity that consumers are willing to buy at specific point of time .  Demand…

Q: Describe what happens when firms and workers underestimate future prices in the economy. Focus your…

A: An economy consist of households and business working in a circular flow in order to achieve their…

Q: When the price level changes, which of the following variables will change and thereby cause a…

A: Effect on real wealth: The intuition behind the important wealth effect is that when the worth level…

Q: When the price level falls Answer households want to lend more, so the interest rate rises making…

A: When the price level falls, inflation also falls. Since the real rate of interest varies inversely…

Q: Give an example of an event which causes the economy to go from point D to point B in the long run.

A: The above graph shows the short run and long run equilibrium of an economy.

Q: If the price level were to rise from 160 to 200, in what direction and by how much would the value…

A: If the price level were to rises, it is called inflation. If the inflation increases or occurs, the…

Q: Assume that the housing market is in equilibriIum in year 1. In year 2, the mortgage rate that banks…

A: As economies emerged, goods and services were produced that required machinery and labour. With time…

Q: AS Price Level 100 105 103 AD Real GDP 10t 20t 30t Considering the figure above, at what point does…

A: There are two types of aggregate supply prevailing in the market based on the time period under…

Q: In the long run, as a result of the sharp increase in saving, the price level , the quantity of…

A: At a given price and particular time, overall demand is defined as cumulative sum of money…

Q: an increase in the price level cause the aggregate supply curve to shiftto anotherupply schedule.…

A: We are going to use AD-AS dynamics to answer this question.

Q: If the price level falls . The value of money increases. The money supply increases. O The value of…

A: Answer is given below

Q: If policymakers decrease aggregate demand, then in the short run the price level Answer falls and…

A: Aggregate demand is the sum of the demand for current output by each of the buying sectors of the…

Q: as the slope of the aggregate supply curve increase, this indicates that; a. inflation will be less…

A: When slope of aggregate supply curve increases,economy would be moving towards potential GDP.

Q: Suppose that when everyone wakes up tomorrow, they discover that the government has given them an…

A: Money supply (MS) is either held as cash by the people or as deposits by the banks. When the…

Q: The most likely explanation for why the price index is rising is because   People are receiving…

A: Price indices are the methods through which the level of price increase or price decrease is gauged…

Q: Price Assume that the housing market is in equilibrium in year 1. In year 2, the mortgage rate that…

A: Answer: If the mortgage rate falls then buying houses will become cheaper. As a result, the demand…

Q: If policymakers decrease aggregate demand, then in the short run the price level   falls and…

A: The aggregate demand refers to the total amount of goods and services demanded in an economy that…

Q: Changes in prices can be attributed to shifts in the supply curve, the demand curve, or both. In…

A: There are various factors that influence the demand and supply curve . following is the demand and…

Q: What happens when the minimum wage increases, in the short run? Select one: a. Aggregate demand…

A: What happens when the minimum wage increases, in the short run? The answer is - b. Aggregate supply…

Q: All prices rise evenly during periods of inflation and deflation.TrueFalse

A: Inflation and Deflation: Inflation refers to a rapid rise in the price of ay commodity and services…

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

A: When government build more hospitals,spending will increase,causing inflation and also jobs will be…

Q: A decrease in the nominal wage will cause the aggregate supply curve to   a. become steeper. .   b.…

A: When there is a change in price of good, it causes movement along the demand curve or supply curve.…

Q: Oil price shocks have been a reoccurring phenomenon over the last fifty years, causing significant…

A: AD-AS model:  The AD-AS framework illustrates national wage determination and price level…

Q: An increase in oil prices will shift the aggregate

A: Answer to the question is as follows :

Q: JA fall in the price level (deflation) causes consumers to expect further falls. This spending and…

A: Answer Explanation The positive feedback: The overall level of costs in the associate economy and a…

Q: The imaginary country of Harris Island has the aggregate supply and aggregate demand curves as Table…

A: The imaginary country of Harris Island has aggregate demand and aggregate demand curve Price…

Q: Are there any “good” supply shocks? Explain

A: A supply shock is an occurrence where the supply of a product or service, or goods and services in…

Q: a decreasein the nominal wages will cause the aggregate supply curve to; a. become steeper b.…

A: The aggregate supply curve shows the total quantity of output (real GDP) that firms will produce and…

Q: The Central Bank of Indonesia sees the potential of the latest credit card technology to facilitate…

A: Credit card: A credit card is a type of plastic money which is being issued by the banks and other…

Q: Aggregate supply (AS) denotes the relationship between the __________________ that firms choose to…

A: Aggregate supply shows positive relationship between price and quantity of output. It is derived…

Q: Changes in the consumer price index are useful in predicting changes in the producer price index.…

A: Inflation is defined as a rise in the general prices of a predetermined basket of goods and services…

Q: Imagine that in the current year the economy is in long-run equilibrium. Then the federal government…

A: Government purchases is a component of aggregate demand and decrease in goverment purchases results…

Q: aggregate demand shifts left, then in the short run

A: AD curve represent total quantity of all goods demanded by economy at different price level.

Q: Which of the following best explains a decrease in real GDP and an increase in the price level? a)…

A: The aggregate supply curve shows different quantities are supplied at different price levels. It…

Q: In the long run, when wages rise, the price level and equilibrium output

A: In the long run when wages rise, the cost of production for Businesses rises and the margins starts…

Q: Other things the same, when the price level rises more than expected, some firms will have

A: Price level refers to the current prices for services and goods produced in an economy.

Q: When a shift in ________________ occurs, rational expectations hold that its impact on output and…

A: Under rational expectation model it is assumed that the individual know about the the model. Its…

Q: The effects of a price level that is higher than expected are shown by shifting the short-run…

A: The short term is the period during which the factor of production (work) can be changed. In the…

Q: In the intermediate range of an aggregate supply curve an increase in total demand will cause…

A: According to economic theories, the aggregate supply curve has three ranges that depicts the…

Q: A negative supply shock causes output to _____ and the price level to _____.

A: Negative supply shock refer to unexpected event that cause leftward shift in supply curve. This is…