The short-run aggregate supply curve shows:O What happens to the level of real GDP suppliers are willing and able to produce in an economy as the overall price level changes, during aperiod in which output prices can change but input prices are fixedO How firms respond to changes in interest ratesO The relationship between the price level and aggregate expenditureO What happens to output in an economy when the government spends more moneyWhich of the following are assumed to remain unchanged along a given short-run aggregate supply curve? Check all that apply.O Input pricesThe price levelO Institutions, such as patent laws and tax systemsReal GDPPotential output (also called the natural rate of real output) refers to:O The quantity of output that would be produced if every member of the labour force worked 40 hours per weekO The quantity of output produced when the prices of all inputs are allowed to fully adjustO The quantity of output produced at the intersection of the aggregate demand and aggregate supply curvesO The maximum possible output of an economy with no unemploymentComplete the following table by matching each definition to the appropriate economic time frame.Long RunDefinitionA period of time in which some input prices and wages are fixedA period of time in which all input prices and wages are renegotiatedShort Run

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The short-run aggregate supply curve shows: O What happens to the level of real GDP suppliers are willing and able to produce in an economy as the overall price level changes, during a period in which output prices can change but input prices are fixed O How firms respond to changes in interest rates O The relationship between the price level and aggregate expenditure O What happens to output in an economy when the government spends more money

The short-run aggregate supply curve shows: O What happens to the level of real GDP suppliers are willing and able to produce in an economy as the overall price level changes, during a period in which output prices can change but input prices are fixed O How firms respond to changes in interest rates O The relationship between the price level and aggregate expenditure O What happens to output in an economy when the government spends more money

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section: Chapter Questions

Problem 2TY

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18 - : 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 decreases and national income increasesB) price rises national income risesC) price increases and national income does not changeD) price goes up and national income goes downE) price decreases and national income decreases.19 - : In which of the following expressions is the equation of change given correctly?A) MV=VK B) MT=PV C) MV=PT D) MP=VY E) MV=P
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