Price Le A Real GDP Comparing points A and B on this graph, which of the following is true? O At point B, there would be less employment and higher unemployment than at point A O At point B, there would be a lower wage than at point A. O At point B, there is a higher price level that increases the quantity of real GDP supplied O At point A, there is greater pressure on the price level and inflation than at point B. O At point A, with a lower wage rate, aggregate supply has decreased compared to point

Price Le A Real GDP Comparing points A and B on this graph, which of the following is true? O At point B, there would be less employment and higher unemployment than at point A O At point B, there would be a lower wage than at point A. O At point B, there is a higher price level that increases the quantity of real GDP supplied O At point A, there is greater pressure on the price level and inflation than at point B. O At point A, with a lower wage rate, aggregate supply has decreased compared to point

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter33: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 4CQQ

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i neeed it in word form.. not handwrittten Explain, with the aid of three separate IS-LM-FE diagrams, how a decrease in government purchases will affect real output, real interest rate and the general price level in three steps:(i) before the general price level adjusts;(ii) when the general price level is adjusting;(iii) after the price adjustment process is completed.Is the general price level increasing or decreasing during the price adjustment process? Explain the intuition of your answer with reference to the AD-AS framework.
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Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for every 1 percentage point fall in the real interest rate. Also assume that the economy’s multiplier is 4. a. If household wealth falls by 5 percent because of declining house values, and the real interest rate falls by 3 percentage points, in what direction and by how much will the aggregate demand curve initially shift at each price level?