real business cycle theory suggest that _______ not important in explaining short-term fluctuations around actual output a. aggregate supply is b. potential output is c. real variables are d. aggregate demand is
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real business cycle theory suggest that _______ not important in explaining short-term fluctuations around actual output
a.
b. potential output is
c. real variables are
d. aggregate demand is
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- Assume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on: aggregate demand, aggregate supply, price level, real GDP.(a) A decrease in government expenditure in infrastructure(b) A severe recession occurs in a country which has been a major importer of thenation’s exports.(c) The federal government increases business taxes with diagramAssume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on:1. aggregate demand, 2. aggregate supply, 3. price level, and 4. real GDP. (a) An increase in government expenditure in infrastructureClick or tap here to enter text.(b) A severe recession occurs in a country, which has been a major importer of thenation’s exports.Click or tap here to enter text.(c) The federal government increases business taxesClick or tap here to enter text.(d) The Central Bank increases the cash interest rateA change in which of the following would shift theshort-run aggregate-supply curve but not the longrun aggregate-supply curve?a. the labor forceb. the capital stockc. the state of technologyd. the expected price level
- Price LRAS; LRAS, LRAS, Level SRAS AD Quantity of Output Refer to Figure. Identify and explain which long run aggregate-supply curve(s) show long-run equilibrium in the economy. Name the factors of economic growth.Which of the following causes the short-run aggregate supply curve to shift to the right? OA. an increase in the expected price of an important natural resource OB. a positive technological change OC. a higher expected future price level O D. a decrease in the capital stockDetermine the effect on aggregate demand/ Short Run Agrregate supply of each of the followingevents. Explain whether it represents a movement along the aggregate demand/ Short run Aggregatesupply curve (up or down) or a shift of the curve (leftward or rightward).a) News of a worse-than-expected job market next yearb) A rise in the consumer price index (CPI) leads producers to increase output.c) A rise in legally mandated retirement benefits paid to workers leads producers to reduceoutput.d) As a result of an increase in the value of the dollar in relation to other currencies, Americanproducers now pay less in dollar terms for foreign steel, a major commodity used in production.e) An increase in the quantity of money by the Federal Reserve increases the quantity of moneythat people wish to lend, lowering interest rates.f) Greater union activity leads to higher nominal wages.g) A fall in the aggregate price level increases the purchasing power of households’ and firms’money holdings. As…
- Price Leve 100 90 80 70 60 50 40 30 0 AD AD₁ 80 160 240 320 400 480 560 640 720 800 Real GDP (billions of dollars) Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? -320 billion b. If the MPC is 0.8, how much do taxes need to change to shift aggregate demand by the amount you found in part a? 80 billion Suppose instead that the MPC is 0.6. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $1 ] billion and taxes need to change by $1 billion.Exercise 4.3 Question Help 1.) Use the line drawing tool to show the effects of an adverse aggregate supply shock such as a decline in worker productivity. Properly label this line. Price Level, P LRAS1 2.) Use the point drawing tool to identify the new long run equilibrium. Label this point 'B'. SRAS AD1 Output, Yh A period during which aggregate output declines. A) Recession B) Expansion C) Inflation
- The determinants of aggregate demand explain shifts in the aggregate demand curve. How does a change in investment spending affect aggregate demand? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Consider an economy with the following aggregate demand (AD) and short-run aggregate supply (SRAS) schedules. Decision-makers have previously made decisions anticipat- ing that the price level during the current period will be p 105° a. Indicate the quantity of GDP that will be produced during the period.1. The aggregate supply (AS) – aggregate demand (AD) model can be used to analyze short run economic events, but not long run changes. True False