Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 23.4, Problem 4QQ
Sub part (a):
To determine
Explain why long-run
Sub part (b):
To determine
Explain the theories that states why the short-run aggregate-supply curve slopes upward.
Sub part (c):
To determine
Explain what variable shift both the long-run and short-run aggregate supply curve.
Sub part (d):
To determine
Explain what variable shift short-run aggregate supply curve but not long-run aggregate supply curve.
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3) 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.
The economy is in long run equilibrium. Congress’s passage of new laws significantly increasing the regulation of business. It is assumed that everything else stays constant. What do we expect in aggregate demand, short run aggregate supply aggregate supply in short run?
And what happens in long run, and long run equilibrium price level and output?
Explicitly state what happens to equilibrium price level and output in both short run and long run and how economy corrects from short run to long run.
42. Suppose that there is a temporary fall in aggregate supply due to a drought. Whathappens in the long-run?(A) Higher prices cause permanent tensions, leading long-run aggregate supply to shiftleft, resulting in a lower natural rate of output.(B) Over time, as the drought conditions fade, aggregate supply rises and returns tothe original natural rate of output.(C) Aggregate demand shifts right, so that prices are higher but long-run output isunchanged.(D) If the person you’re dating enjoys Taylor Swift, dump them immediately
Chapter 23 Solutions
Essentials of Economics (MindTap Course List)
Ch. 23.1 - Prob. 1QQCh. 23.2 - Prob. 2QQCh. 23.3 - Prob. 3QQCh. 23.4 - Prob. 4QQCh. 23.5 - Prob. 5QQCh. 23 - Prob. 1CQQCh. 23 - Prob. 2CQQCh. 23 - Prob. 3CQQCh. 23 - Prob. 4CQQCh. 23 - Prob. 5CQQ
Ch. 23 - Prob. 6CQQCh. 23 - Prob. 1QRCh. 23 - Prob. 2QRCh. 23 - Prob. 3QRCh. 23 - Prob. 4QRCh. 23 - Prob. 5QRCh. 23 - Prob. 6QRCh. 23 - Prob. 7QRCh. 23 - Prob. 1PACh. 23 - Prob. 2PACh. 23 - Prob. 3PACh. 23 - Prob. 4PACh. 23 - Prob. 5PACh. 23 - Prob. 6PACh. 23 - Prob. 7PACh. 23 - Prob. 8PACh. 23 - Prob. 9PACh. 23 - Prob. 10PA
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- 1-What is the general relationship between a country's price level and the quantitiy of it's domestic output (Real GDP) demanded? Who are the buyers of real US GDP? 2- what assumptions cause the immediate -short-run aggregate supply curve to be horizontal? why is the long-run aggregate supply curve vertical? Explain the shape of the short-run aggregate supply curve . Why is the short-run curve relatively flat to the left of the full employment output and relatively steep to the right ? 3- why does a reduction in aggregate demand tend to reduce real output, rather than the price level? 4- Explain" unemployment can be caused by a decrease of aggregate demand or a decrease of aggregate supply ."In each case , specify the price level outcomes . 5- In early 2001 investment spending declined in the USA. In the 2 months follwing september , 11 2001 attacks on the US, consumption also declined . Use Ad-AS analysis to show the two impacts on Real GDP. 6- Using the concept of the multiplier ,…arrow_forwardExplain why the long-run aggregate-supply curve is vertical. Explain three theories for why the short-run aggregate-supply curve slopes upward. What variables shift both the long-run and short-run aggregate-supply curve? What variable shifts the short-run aggregate-supply curve but not the long-run aggregate-supply curve ?arrow_forward11. Explain why the following statements are false. A.) “The aggregate-demand curve slopes downward because it is the horizontal sum of the demand curves for individual goods.” B.) “The long-run aggregate-supply curve is vertical because economic forces do not affect long-run aggregate supply.” C.) “If firms adjusted their prices every day, then the short-run aggregate-supply curve would be horizontal.” D.) “Whenever the economy enters a recession, its long-run aggregate-supply curve shifts to the left.”arrow_forward
- 16. Why is the aggregate supply curve completely vertical in the long run? A. Short-run business cycles do not affect short-run output. B. Aggregate supply is impossible to illustrate in the long run. C. A country’s total output will always be constant. D. A country’s total output is not affected by price in the long run.arrow_forward2. What impact would a change that shifts an economy’s production possibilities curve outward have on the long-run aggregate supply curve? How have improvements in computer technology affected production possibilities and the long-run aggregate supply curve?arrow_forward
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