The economy of Moneyland has an actual unemployment rate that is less than the natural unemployment rate. (d) Assume instead that the government of Moneyland decides not to take any policy action. Will short-run aggregate supply increase, decrease, or stay the same in the long run? Explain.
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The economy of Moneyland has an actual
(d) Assume instead that the government of Moneyland decides not to take any policy action. Will short-run
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- 35- : If aggregate demand increases in an economy while aggregate demand is constant in the short run, which of the following statements is correct for the new equilibrium point? a) price goes up national income goes down B) price goes up national income goes up NS) price goes down national income goes down D) price goes down and national income goes up TO) price goes up national income does not changeQuestion 27 The slope of a long-run aggregate supply curve is vertical, because full-employment output depends directly on the price level. vertical, because full-employment output is independent of the price level. horizontal, because full-employment output is independent of the price level. upward sloping, because as the price level rises, firms will increase output. upward sloping, because rising prices reduce real wealth and spending. Question 28 Supposed you are offered a job with Amazon upon graduation. Your starting salary will be $70,000 which will put you in the 22% federal income tax bracket. The total amount of income taxes you pay is $11,285.50. Your average tax rate is approximately ______. 25.0% 16.1% 21.3% 13.3% 11.5% Question 30 The largest portion of the federal budget is…True or false The aggregate supply curve is vertical in the long run at the full-employment level of output
- QUESTION 4 (a) Price can affect the aggregate supply curve (AS). Can you identify factors other than price that might affect the AS curve? (b) Much of the current labor force in Malaysia is from other countries such as Indonesia, Vietnam, India, and Philippines. What is the effect of these foreign workers on our local skills and expertise in respect to the job market?Multiple choice. 3. Which of the following statements is true if there is an increase in aggregate demand while the economy is in equilibrium on a positively sloping short-run aggregate supply curve? a) Prices rise, national income does not change B) Prices decrease, national income does not change C) Prices go up and national income goes down. D) Prices decrease and national income decreases. E) Prices rise, national income rises26. Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo respectively, which of the following explains the adjustment towards long-run equilibrium depicted in Figure A? a) Unemployment (resulting from the short-run equilibrium being below LRAS) causes wages to decline, which increases AS until long-run equilibrium is attained at full employment level of income and a lower price level. b) Government spending is increased, increasing AD to a level sufficient to attain long-run equilibrium at full employment level of income and a higher price level. c) In attempting to produce beyond the economy's natural level of GDP, producers bid up wages and prices of other resources, causing the AS to decrease to the point where long-run equilibrium is restored. d) Taxes are increased reducing AD to a level consistent with long-run equilibrium.
- Aggregate supply curve slopes upward to the right because of sticky profits. True or False. TrueFalseComment, on the likely outcome with sufficient arguments? a) Impact on aggregate demand of the economy if imports are greater than exports.b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India.c) Inflation rate in the country has reached 6.73%.5 An economy experiences a decade in which the quarterly unemployment rate fluctuates between 2.5% and 3.5%. Due to a number of shocks the economy gets into problems and the unemployment rate increases by 0.5%-point per quarter (So it become 4.0% in Q1, 4.5% in Q2, 5% in Q3 and 5.5% in Q4, also in the second year after the shock the unemployment rate continues to increase. This experience is consistent with: a locally and globally stable equilibrium a locally and globally unstable equilibrium a locally unstable and globally stable equilibrium a locally stable and globally unstable equilibrium
- 7) During the recession of 2007-2009, the U.S. economy was experiencing a decrease in home prices and consumer wealth, a credit crisis in the financial markets, and declining consumer and business confidence. What components of aggregate demand were affected and what was the impact on real output? What were the policy options?27. Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo respectively, which of the following explains the adjustment towards long-run equilibrium depicted in Figure C? a) Unemployment (resulting from the short-run equilibrium being below LRAS) causes wages to decline, which increases AS till long-run equilibrium is attained at full employment level of income and a lower price level. b) Government spending is increased, increasing AD to a level sufficient to attain long-run equilibrium at full employment level of income and a higher price level. c) In attempting to produce beyond the economy's natural level of GDP, producers bid up wages and prices of other resources, causing the AS to decrease to the point where long-run equilibrium is restored. d) Taxes are increased reducing AD to a level consistent with long-run equilibrium.137.) If residents are myopic, an increase in “worthless” government spending, financed by higher current taxes will cause Lower output and higher prices in the short run A rise in aggregate demand, and thus higher output in the long run A decrease in aggregate demand None of the above