Illustrate the short-run effect of this change, before any long-run adjustments have taken place, by shifting one or both of the supply curves (SRAS and LRAS) on the following graph. If you do not believe there will be any long-term effects, leave the LRAS in its current position.Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps backto its original position, just drag it a little farther.LRASSRAS160120*8061218REAL GDP (Trillions of dollars)PRICE LEVEL240200400024ADSRASLRASAssume that aggregate demand is unaffected by the oil price drop. After the economy has fully adjusted to the oil price drop, the long-run effect isa decreasean increasea decreasein aggregate output andan increasein the price level.no changeno change Which of the following would shift the SRAS curve to the right (ignoring any potential effect on LRAS)?O The world price of oil increases rapidly without warning but is not expected to remain at the new high level permanently. However, in theshort run, it is more costly for all firms to produce goods and services.The government introduces a set of new regulations that make it more costly for firms to produce and sell goods and services. Theseregulations are expected to be permanent.O The interest rate decreases, spurring investment spending.There is an increase in government spending.O There is a technological improvement that allows firms to reduce their costs of production permanently.The following graph shows the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve for an economy. Supposethe world price of oil decreases rapidly without warning but is not expected to remain at the new low level permanently. However, in the short run, it isless costly for firms to produce goods and services.Illustrate the short-run effect of this change, before any long-run adjustments have taken place, by shifting one or both of the supply curves (SRAS and LRAS) on the following graph. If you do not believe there will be any long-term effects, leave the LRAS in its current position.Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps backto its original position, just drag it a little farther.240200LRASSRASSRAS(?)

Short-run aggregate supply:- The SRAS curve demonstrates that the amount of actual GDP which will be…

Which of the following would shift the SRAS curve to the right (ignoring any potential effect on LRAS)? O The world price of oil increases rapidly without warning but is not expected to remain at the new high level permanently. However, in the short run, it is more costly for all firms to produce goods and services. O The government introduces a set of new regulations that make more costly for firms to produce and sell goods and services. These regulations are expected to be permanent. O The interest rate decreases, spurring investment spending. O There is an increase in government spending. O There is a technological improvement that allows firms to reduce their costs of production permanently. The following graph shows the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve for an economy. Suppose the world price of oil decreases rapidly without warning but is not expected to remain at the new low level permanently. However, in the short run, it is less costly for firms to produce goods and services. Illustrate the short-run effect of this change, before any long-run adjustments have taken place, by shifting one or both of the supply curves ( SRAS and LRAS) on the following graph. If you do not believe there will be any long-term effects, leave the LRAS in its current position. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter10: Aggregate Demand And Supply

Section10.A: The Self Correcting Aggregate Demand And Supply Model

Problem 10SQ