Why the slope of the aggregate supply curve differs in the short-run and in the long-run? Why the long- run aggregate supply curve is vertical and why the short-run supply curve is upward sloping? Explain in detail.

Q: 1. . In the framework of the aggregate-supply/aggregate-demand model, i) Outline and appraise the…

A: When all other effects on production plans (the money wage rate, the prices of other resources, and…

Q: Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo respectively, which of…

A: The aggregate demand curve shows the total demand for all the finished goods and services in an…

Q: 6. Why the aggregate supply curve slopes upward in the short run In the short run, the quantity of…

A: Introduction The reason behind the upward sloping of the aggregate supply curve is sticky price. The…

Q: How will the output, unemployment rate, and price level change in the short run AND in the medium…

A:

Q: 28. Start at full-employment (FE) equilibrium with flexible wages and worker misperception of price…

A: The increase in aggregate demand will shift the demand curve rightwards or if there is a decrease in…

Q: 45. Suppose that there is a temporary fall in aggregate supply due to a drought. What happens in the…

A: Answer: Higher prices cause permanent tensions, leading long-run aggregate supply to shift left,…

Q: The Aggregate Supply (AS) curve slopes upward to reflect the profit motive of businesses. So, why…

A: AS curve: It shows the quantity of the real GDP supplied by the economy at various price levels.

Q: 2. Suppose that there is a temporary fall in aggregate supply due to a drought. What happens in the…

A: The economy is in long-run equilibrium when the actual equilibrium level of output is equal to the…

Q: 1. Draw five aggregate supply and demand graphs at long run equilibrium. Illustrate what would…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: 5. What is the level of Potential GDP in Spain? 6. What is the size of real GDP in the short run…

A: The total monetary or market worth of all finished goods and services produced inside a country's…

Q: 1. The short-run aggregate supply curve shows:   a. The relationship between the price level and…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Explain why shifts of the aggregate demand curve change the price level in the long run but do not…

A: 10-3 Potential output is also called the natural GDP which says the maximum level of real GDP that…

Q: 6. Why the aggregate supply curve slopes upward in the short run In the short run, the quantity of…

A:

Q: Your answer must be wrong," a fellow classmate says. "The question is asking about the long run, but…

A: Here, a student states that there will be change in price level as well as real output level, in the…

Q: In Keynesian theory, why is the aggregate supply curve horizontal in the short run?

A: Option (2).

Q: What are the determinants for aggregate demand and aggregate supply? How would an ideal aggregate…

A: The link between the quantity of a commodity that producers want to sell at various prices and the…

Q: 5.2 Explain why the long-run aggregate supply curve is vertical. Then, explain how each of the…

A: You have asked multiple questions. We will answer the first question for you. If you want any…

Q: 26. Assuming Aggregate Demand and Aggregate Supply are initially at ADo and ASo respectively, which…

A: Given is that aggregate Demand and Aggregate Supply are initially at ADo and ASo respectively, so…

Q: Question 7 The model of aggregate demand and aggregate supply Answer is different from the model of…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 2) What is the difference between the long-run aggregate supply and the short-run aggregate supply…

A: Answer: Aggregate supply refers to the total output produced by the firms in an economy. Short-run…

Q: A new mattress has allowed workers to get more sleep. As a result, when they are awake, they are…

A: Long run aggregate supply (LRAS) depicts the maximum level of output that a nation can produce by…

Q: Because fluctuations in the world oil price make the U.S. short-run macroeconomic equilibrium…

A: Oil is considered as the major driver of economic fluctuations because oil market affects the…

Q: 34) Unemployment would increase and prices would decrease if aggregate demand shifted left aggregate…

A: When the aggregate demand is decreasing, it shifts leftward and the price level decreases. Since the…

Q: QUESTION 1 The aggregate demand curve: is upward sloping because a higher price level is necessary…

A: An economic tool used for the measurement of the sum total of demand for all type of finished goods…

Q: 1. Draw five aggregate supply and demand graphs at long run equilibrium. Illustrate what would…

A: The aggregate demand–aggregate supply model, often known as the AD–AS model, is a macroeconomic…

Q: As the aggregate demand curve shifts to the right: A)the price level falls and real GDP rises. B)…

A: Aggregate demand is the sum of consumption expenditure, investment expenditure and government…

Q: 5. Why the aggregate supply curve slopes upward in the short run In the short run, the quantity of…

A: The sticky wage theory estimates that worker pay will in general answer gradually to changes in…

Q: Assume that the long-run aggregate supply curve is vertical at Y = 3,000 while the short-run…

A: A supply shock is an economic event that leads to a sudden increase or decrease in the supply of…

Q: Distinguish between the short-run aggregate supply curve and the long-run aggregate supply curve.

A: *ANSWER :-  4.1)

Q: 6. Suppose political turmoil causes a significant decrease in oil production in the middle east. How…

A: In the middle East economy, it is given that the production of oil decreases due to political…

Q: 6. Why the aggregate supply curve slopes upward in the short run In the short run, the quantity of…

A: Sticky-Wage Theory: the sticky wage theory exhibits that the wages of the laborer remain unchanged…