Which of the following is the result of more M1 in the economy? A. rising prices due to more money to spend B. falling prices since there is a surplus of money C. stabilizing prices since M1 does not affect prices D. fixed prices since the government will lower taxes
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- True or False, the aggregate supply curve is a probably thought of as a price/output response curveDiscuss the impact of taxes and autonoumous consumption on the price level.How can a cost-push rise in the price level arise? A cost-push rise in the price level can arise from an increase in OA. government expenditure OB. the money wage rate or money prices of raw materials OC. the quantity of money O D. exports DII F4 Q Search F5 F6 F7
- Refer to the table below. Real Output Demanded, Billions Price Level Real Output Supplied, Billions $ 506 108 $ 513 508 104 512 510 100 510 512 96 507 514 92 502 Instructions: Enter your anwers as whole numbers. A). What is the equilibrium level of output? What is the equilibrium price level? B). Suppose that aggregate demand increases such that the amount of real output demanded rises by $ 7 billion at each price level. Insert the new values for real output demanded in the table below. Real Output Demanded, Billions New Real Output Demanded, Billions Price Level Real Output Supplied, Billions $ 506 108 $ 513 508 104 512 510 100 510 512 96 507 514 92 502 What is the new equilibrium level of output? What is the new equilibrium price level? By what percentage will the price level increase? Will this inflation be demand-pull inflation or will it be cost-push inflation? C) If potential real GDP ( that is, full-employment GDP) is $ 510…By decreasing government spending and aggregate demand, the policy ________ the price level and ________ equilibrium real GDP, ceteris paribus. Select one: a. decreases; increases b. increases; decreases c. increases; increases d. decreases; decreasesRecalling Clasical, Keynesian, and now Supply side economics. How would you describe each school
- Describe how different parts of the economy may have experienced shifts and changes in supply and demand. Provide at least 4 examples.You are the chair of the president’s Council of Economic Advisers. There has been an extremely hot and dry summer due to climate change. As a result, crop production has fallen drastically. The president calls you to the White House to discuss the impact on the economy. Would you explain to the president that a sharp drop in U.S. crop production would cause inflation, unemployment, or both?Discuss the three main supply-side policies that the government can use to reduceunemployment?
- Economics Assess the following statements whether are true or false? Justify your answer making reference to the objectives of the policy maker and please answer the question in 5 lines a. Economic policy should aim to limit firm-level volatility ( b. Economic policy should aim to limit macro-level volatilitySuppose the economy begins at potential output when the federal government decreases taxes. A. Graph the impact of this action using AS-AD. Note the original equilibrium as point "A" and the short-run equilibrium after the policy action as point "B". B. Graph the transition from the short run to the long run.Draw a graph, using the Aggregate Demand – Aggregate Supply curves, the result of a tax increase and cuts in federal expenditures during a period of inflation. Label all axes and curves and show which curve shifts and indicate the new equilibrium. As well as explain your graph in words.