Real and nominal variables are highly intertwined, and changes in the money supply change real GDP. Most economists would agree that this statement accurately describes   both the short run and the long run. the short run, but not the long run. the long run, but not the short run. neither the long run nor the short run

Q: In year 2007, what was short-run output? Pick the closest value. 30% of current nominal GDP 30% of…

A: Potential GDP refers to the full employment level of GDP. In other words, it is the country’s…

Q: Which cost of production is the most influential in short-run aggregate supply and how does the…

A: Aggregate Supply The aggregate supply is the relationship between an economy's price level and…

Q: Which of the following is most commonly used to monitor short-run changes in economic activity?…

A: The real GDP is most commonly used to monitor short-run changes in economic activity. While…

Q: In the AD/AS framework, when the economy is in long-run equilibrium, Select one: a. inflation is…

A: In an economy, aggregate demand and aggregate supply are used to France the macroeconomic model to…

Q: If the government chooses not to intervene in the economy, what will happen to the above variables…

A: If the government chooses not to intervene in the economy, then the following will happen to the…

Q: The aggregate supply-aggregate demand model predicts that an unexpected increase in government…

A: The aggregate supply-aggregate demand model predicts that an unexpected increase in government…

Q: A fall in the amount of inflation, given a fixed nominal interest rate will cause: Group of answer…

A: Answer- Need to find- A fall in the amount of inflation, given a fixed nominal interest rate will…

Q: The classical model is appropriate for analysis of the economy in the   long run, since evidence…

A: Classical model believes that economy operates in full employment level because prices and wages are…

Q: Assume that nominal wages increase by 3% in the economy.  As a result, we observe   Question 32…

A: Nominal wages are money wages paid to workers or salaries paid to workers, which would result in the…

Q: Use the model of aggregate demand and short run aggregate supply to explain how each of the…

A: Below is the AD and AS graph.

Q: The theory of menu costs provides an explanation of: OWhy we observe very wide swings in prices and…

A: Menu cost is the cost of changing the price in the menu. For example, suppose a restaurant would…

Q: The model of aggregate demand/aggregate supply... A) Identifies the potential GDP and price level…

A: The answer is - B) Identifies the equilibrium GDP and price level as well as the gap between the…

Q: Immigration and inflation: Suppose a large number of new immigrants enterthe labor market. Assume…

A: Whenever new emigrants come into the place, the sudden influence is on necessary products like…

Q: Is it good for an economy to experience sudden inflation or deflation? Explain with examples

A: Answer:- Lоw-level  inflаtiоn  (2–4  рer  сent)  wоuld  indiсаte  the  eсоnоmy  is  dоing  well,…

Q: Which of the following is most commonly used to monitor short-run changes in economic activity?a.…

A: The real GDP is the inflation adjusted value of goods and services produced in a country during a…

Q: In the Keynesian framework, for each of the following events which might cause a recession and/or…

A: Note:- Since we can only answer up to three subparts, we'll answer the first three please repost the…

Q: Real and nominal variables are highly intertwined, and changes in the money supply change real GDP.…

A: Short Run Real and nominal variables are highly intertwined Changes in money supply can push real…

Q: Consider the short run and the long run and then choose the statement that is correct.  A. The…

A: The money supply is a term you may or may not be familiar with. This refers to all of the liquid…

Q: In the short run, what is the impact on the price level and the level of the real GDP of each of the…

A: In equilibrium, the supply and demand curves intersect at E and the price level is at P0 and GDP…

Q: Discuss money supply and inappropriate government policies as causes of economic fluctuations

A: Economic fluctuations are caused due to recession and inflation.

Q: rchase goods and services then cash. (a) Draw a correctly labeled graph of the money market and…

A: a. Suppose money market is equilibrium where money supply curve and money demand curve tend to…

Q: Stagflation occurs when there is in unemployment and in inflation. This occurs graphically as a

A: Stagflation is characterized by slow economic process and comparatively high unemployment—or…

Q: Suppose that firms become very pessimistic about future business conditions and cut heavily on…

A: Economics starts at E's long-term equilibrium. The balance level of GDP Qf and the equilibrium price…

Q: If money supply rises, will the price level rise by the same percentage? It all depends on what…

A: Money supply: It refers to the increase in the money that is available with the public. The more…

Q: John Maynard Keynes fundamentally disagreed with Adam Smith in that according to Keynesian Theory:…

A: The theories of the economist giants smith and Keynes have been bridged apart from their school of…

Q: How does inflation affect long-run real growth?

A: Option 1 is wrong because higher inflation does not increase growth-rate in medium-run or long-run.…

Q: Brent, the international oil marker, hit US$130 a barrel on 8th March 2022. The oil price is close…

A: Aggregate supply, is the total supply of labor and products created inside an economy at a given by…

Q: Consider the short run and the long run and then choose the statement that is correct. O A. The real…

A: According to the quantity theory of money there is direct relation between supply of money and price…

Q: Drought in South Africa destroyed farm crops and drive up theprice of food. What is the effect on…

A: The destruction of crops means the availability or the supply of food will fall so there will be a…

Q: According to Keynes, nominal wage increases mostly and directly lead to a inflationary development a…

A: Inflation: - Inflation is the phenomenon of an increase in the prices of goods and services in an…

Q: In the short run, policy that changes aggregate demand changes Answer both unemployment and the…

A: In the short run, the aggregate supply curve is upward sloping and the aggregate demand curve is…

Q: According to the _____ theory of business cycles, a change in the growth rate of the quantity of…

A: The neutrality of money is one of the assumptions of the Real business cycle theory of the business…

Q: According to the quantity theory of money, a. V and M are constant. b. V and Y are not affected by…

A: Quantity Theory of money was given by Irwing Fisher.

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: According to classical macroeconomic theory,   a. the price level is sticky in the short run and it…

A: Macroeconomic is an economic theory that depicts the aggregates of the economy. it studies the…

Q: When prices rise at an extraordinarily high rate, it is called: a. hyperinflation b. deflation c.…

A: Inflation refers to a situation which increases the general price level in the economy leading to…

Q: For example, an increase in the money supply,(NORMINAL, REAL) a    variable, will cause the price…

A: The real value  = nominal -inflation. The real value is achieved by deleting the effect of price…

Q: When workers do not notice inflation has taken place they do not realize that their real wage has…

A: Answer to the question is as follows:

Q: The classical model is appropriate for analysis of the economy in the   long run, since evidence…

A: The long-run aggregate supply curve shows the potential output of the economy in the long run. It…

Q: omework (Ch 20) For example, an increase in the money supply, a variable, will cause the price…

A: Equilibrium in the goods market in the economy occurs where aggregate demand equals aggregate…