Suppose most business executives expect a slowdown in the economy.  How might this situation affect the economy?

Q: Suppose the economy is operating at potential GDP when it experiences an increase in export demand.…

A: Increasing desire for products and services is created by an overactive market, that drives up the…

Q: Why might it be important for policy makers to know which in zone of the SRAS curve the economy is?

A: SRAS (Short run aggregate supply): It refers which shows the positive relationship between the…

Q: What is the long run aggregate supply curve

A: An aggregate supply curve shows the relationship between the output produced in an economy and the…

Q: How do propensities and multipliers, and even expectations affect the outcomes in a downturn

A: In an economy, when talking about propensity, expectations and multipliers, these are the ratios of…

Q: Why does the effect of a given increase in aggregate demand have a larger effect on real output in…

A: Answer: Introduction: In the short run, the output can be increased by employing more laborers. In…

Q: Define stagflation?

A: The persistent increase in the price level is known as the inflation. Inflation is worrisome for the…

Q: Which of the following would not increase Aggregate Demand? a. Increased Consumption b. Increased…

A: Aggregate demand is given by  AD= C+I+G+NX Where C is consumption I is investment G is government…

Q: Why might economists in the United States fear that Stagflation could develop in 2022?

A: Stagflation is defined as a situation "marked by weak economic development and relatively high…

Q: How do changes in government spending and taxes affect the equilibrium price level and real GDP?

A: In an economy, equilibrium level of real GDP is determined by the intersection of aggregate demand…

Q: How does each of the following infrastructure items affect aggregate supply?   courts and prisons.

A: Aggregate supply is the total quantity of goods and services produced in an economy.

Q: How can shipping delays and shortages of intermediate goods cause a recession?   Why may these…

A: In economics, recession refers to a fall in industrial or trade activity that implies a decline in…

Q: Why is an economy not in equillibrium when aggregate demand is not equal to aggregate supply?

A: Aggregate demand (AD) is the sum total amount of commodities and services demanded in an economy at…

Q: Which would most likely increase aggregate supply?  An increase in the prices of imported products…

A: The aggregate supply curve is the total supply of goods and services in an economy that is willing…

Q: Y=C t /even when the economy is not in equilibrium

A:

Q: Does the AD curve shift?

A: AD (Aggregate demand) depicts sum dd (demand) for the nation and how it interconnects at the level…

Q: According to the textbook definition, a recession occurs if ___ GDP decreases for ____ Question…

A: If nominal GDP decreases for consecutive 2 quarters,then recession occurs.

Q: What effect would an increase in aggregate supply have on price levels and GDP?

A: The aggregate supply curve is used to show the relationship between the quantity supplied of real…

Q: Producers will change their prices when GDP is at the equilibrium level.  True or  False

A: Gross Domestic Product is the sum total amount of goods and services produced in the economy at a…

Q: or False: The economy is currently in short-run equilibrium.

A: True  The economy is in short run equilibrium where SRAS = AD at 80 units of output and $ 100 price…

Q: Will the shift of SRAS to the right tend to make the equilibrium quantity and price level higher or…

A: The total supply of goods and services that companies in a national economy expect to sell over a…

Q: if an inflationary gap exists, what will happen to business inventories?

A: The difference between what gross domestic product (GDP) would be at full employment and the actual…

Q: Consumer spending fell significantly at the start of the pandemic by 13.6%, but increased by 5.6% in…

A: A recession is characterized as a prolonged period of low or negative real GDP (output) growth,…

Q: What effect would an increase in aggregate demand have on price level and GDP?

A: Answer: Aggregate demand: It refers to the total demand for final goods and services in an economy…

Q: What effect would an increase in aggregate demand have on price levels and GDP?

A: Gross domestic product refers to the total amount of all the goods, and services produced in an…

Q: Describe the mechanism by which demand creates its own supply.

A: The mechanism by which demand creates its own supply was introduced by economist John Maynard Keynes…

Q: What relationship does the short-run aggregate supply curve represent?

A:

Q: Deflation is particularly bad for an economy in recession for all of the following reasons EXCEPT…

A: In deflation, prices fall resulting in lower spendings.

Q: If the price level increases, what happens to the consumption function? Why?

A: The following problem has been solved as follows:

Q: Y =  C +  S even when the economy is not in equilibrium.  True Or False

A: In an economy, saving is the part of income which is not spent on consumption expenditure, and so Y…

Q: How can they say that "Rising prices are symptom of an expanding current supply"?

A: Inflation is the rate of increase in prices over a given period of time. Inflation at macro level…

Q: What effects would  increase in aggregate supply have on price levels and GDP?

A: In economics, the aggregate supply level is a concept which measures the level of total output or…

Q: What effects would  increase in aggregate demand have on price levels and GDP?

A: Aggregate demand is the total demand for final services and goods at a given period and price level.…

Q: If households decide to save a larger portion of their income, what effect would this have on the…

A: If the household decides to save a large proportion of their income then they will spend less on…

Q: Your Facebook feed shows a news article which says the Consumer Confidence Index has decreased.…

A: Meaning of Aggregate Demand and Aggregate Supply: The term aggregate demand refers to the…

Q: If the economy is operating in the Keynesian zone of the SRAS curve and aggregate demand falls,what…

A: Keynes postulated that there is a difference between the short-run and the long-run supply curve of…

Q: Explain by using the AD- AS diagram how in absence of any government intervention the economy may…

A: When there is no government intervention. At the new level of the equilibrium output since Y'<…

Q: If an inflationary gap exists, what will happen to business inventories?  How will producers…

A: The inflationary gap refers to a situation when the current level of real GDP is higher than the…

Q: What is the short run aggregate supply curve

A: The short run aggregate supply curve is an upward loping curve, because quantity supplied is…

Q: Using AD and AS curves determine how an increase in the government's ability to improve…

A: A recession can be characterized as a supported time of feeble or negative development in genuine…

Q: State the main components of the aggregate demand in the economy

A: According to the given question Aggregate demand is initially known as the total amount of the…

Q: What effect would an increase in aggregate demand have on price levels and GDP ?

A: Aggregate demand , which signifies the planned demand by economic agents like consumers, business…

Q: Three ways to increase Consumption which would cause a shift right in the AD curve would be or or

A: At different price levels, the aggregate demand curve depicts the total quantity of all commodities…