The aggregate supply curve A) is a market supply curve. B) relates output with the price level. C) embodies the same logic that lies behind an individual firm's supply curve. D) is the sum of the individual supply curves in the economy
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A) is a market supply curve. B) relates output with the price level. C) embodies the same logic that lies behind an individual firm's supply curve. D) is the sum of the individual supply curves in the economy
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- The aggregate supply curve for the long run is: Group of answer choices Represents potential output, full employment output and is a vertical line. a vertical line when output is plotted against the price level. Potential output for the economy. the full employment aggregate supply curve.Firm X, a leading manufacturer of rubber tires in country A, caters to almost one-third of the domestic tire market. The country was hit by a recession last year that caused the national output growth to be negative. Simon Reeds, the CEO of firm X, feels that these fluctuations in the business environment are short-lived and expects the economy to recover very soon. In spite of the recession, Simon feels that the firm can actually invest in expanding its facilities as it has sufficient cash flows to continue its operation during the crisis period. The firm's marketing head, Sandra Jones, counters this by saying that the firm is already losing sales due to the recession and they should not increase costs further by making large-scale investments in the present climate. Which of the following, if true, would support the CEO's claim? A. The government recently announced a plan to offer incentives to buyers in the car and household appliances market. B.…Firm X, a leading manufacturer of rubber tires in country A, caters to almost one-third of the domestic tire market. The country was hit by a recession last year that caused the national output growth to be negative. Simon Reeds, the CEO of firm X, feels that these fluctuations in the business environment are short-lived and expects the economy to recover very soon. In spite of the recession, Simon feels that the firm can actually invest in expanding its facilities as it has sufficient cash flows to continue its operation during the crisis period. The firm's marketing head, Sandra Jones, counters this by saying that the firm is already losing sales due to the recession and they should not increase costs further by making large-scale investments in the present climate. Which of the following, if true, would support the marketing head's claim? A. In the previous recession, a leading player in the hospitality sector had expanded its facilities but was unable…
- The following events have occurred in the history of the United States: A deep recession hits the world economy. The world oil price rises sharply. U.S. businesses expect future profits to fall. Explain the combined effects of these events on U.S. real GDP and the price level,starting from a position of long-run equilibrium.Unlike the Suez Canal, the Panama Canal is highly relevant for the US economy. A blockage of the Panama Canal could produce severe supply disruptions for the US economy. Suppose there is a severe blockage of the Panama Canal that last for six weeks. The following questions consider how such a blockage of the Panama Canal would affect the US economy in the short-run. Once Panama Canal officials are able to unblock the canal and get traffic flowing again, the US economy will begin to recover from the supply disruptions. Which of the following statements describes the US economy after the Panama Canal has become unblocked? A) The price level will increase back to its initial level of P*, and real GDP will decrease back to its natural level. B) The price level will decrease back to its initial level of P*, and real GDP will increase to its natural level. C) The price level will increase to its original level of P*,…Unlike the Suez Canal, the Panama Canal is highly relevant for the US economy. A blockage of the Panama Canal could produce severe supply disruptions for the US economy. Suppose there is a severe blockage of the Panama Canal that last for six weeks. The following questions consider how such a blockage of the Panama Canal would affect the US economy in the short-run. Once Panama Canal officials are able to unblock the canal and get traffic flowing again, the US economy will begin to recover from the supply disruptions. Create a graph that describes the US economy after the Panama Canal has become unblocked.
- The following events have occurred in the history of the United States: A deep recession hits the world economy. The world oil price rises sharply. S. businesses expect future profits to fall. Explain the separate effects of each event on U.S. real GDP and the price level, starting from a position of long-run equilibrium.Researchers in an oil producing country discover a cost effective method using existing levels of capital and labour to extract large amounts of petroleum resources that were previously inaccessible. All else equal, which of the following will most likely occur. Select one: The long run aggregate supply curve will shift to the left The long run aggregate supply curve will shift to the right The aggregate demand curve will shift to the left The aggregate demand curve will shift to the rightAssume the economy of Mongolia is in a long run equilibrium with full employment. a. Draw a correctly labeled graph of short run aggregate supply, long run aggregate supply, and aggregate demand. Show each of the following. Equilibrium output, labeled Y1. Equilibrium price level, labeled PL b. Assume there is an increase in consumer spending in Mongolia. On your graph in part A, show the effect this will have on the equilibrium in the short run, labeling the new equilibrium output and price level Y2 and PL2, respectively. c. What two fiscal policy options does the federal government have to fix the market imbalance? Explain how each would affect the economy.
- The Great Depression showed that the short-run aggregate supply curve and the aggregate demand curve 1. can never lead to deflation. 2.can intersect at output levels below full employment. 3.must always intersect at full employment. 4.must intersect at output levels above full employment.Variables typically included in a multivariate supply function (other than the price and quantity of the item the supply function represents) are prices of other goods that use similar input resources for production, the number of suppliers, techniques of production, taxes and subsidies, prices of input resources, weather, and expectations. Please answer the following questions about the affect changes in other variables might have on the supply of the item. These changes will either cause supply to increase (shift right) or decrease (shift left). Use either word as applicable, for the short answer. 1. If the market price of gasoline returns to the near $4.00 per gallon level then demand for gas-gulping large autos is likely to decrease and manufacturers of these autos are likely to _____________ their supply: 2. A relative increase in the productivity of the technology used to produce the item being considered is likely to _____________________ its supply. 3. Hailstorms have pelted…Which of the following changes will have the smallest impact on the aggregated demand in the short-run? Group of answer choices A decrease in taxes of $100 An increase in government spending of $100 An increases in exports of $100 A decrease in savings of $100
