When the economy is producing at an output level below the
potential output,
the unemployment rate...
When the economy is producing at an output level below the
potential output,
the unemployment rate is above the natural rate of
unemployment.
the short-run aggregate supply curve will slowly shift to the
left when wages start to adjust.
the intersection of the short-run aggregate supply curve and the
aggregate demand curve is to the right of the long-run aggregate
supply curve.
the economy might be at the long-run equilibrium.
Which of the following is not a determinant of the...
11. Demand-pull
inflation occurs when the aggregate __________ curve shifts
_______.
A. demand, right
B. demand, left
C. supply, right...
11. Demand-pull
inflation occurs when the aggregate __________ curve shifts
_______.
A. demand, right
B. demand, left
C. supply, right
D. supply, left
12. When the
aggregate price level decreases, the resulting decrease in interest
rates will most likely ___________ investment and _____________
consumption.
A. increase, increase
B. increase, decrease
C. decrease, increase
D. decrease, decrease
13. The economy is
operating at full capacity. The long-run aggregate
supply curve is __________. In the long run, an increase
in the aggregate price level will __________ output.
A. horizontal, increase
B. horizontal, not change
C. vertical, increase
D. vertical,...
Suppose the economy is in long run equilibrium, with real GDP at
$19 trillion and the...
Suppose the economy is in long run equilibrium, with real GDP at
$19 trillion and the unemployment rate at 5%. now assume that the
central bank unexpectedly decreases the money supply by 6%. A.
Illustrate the short run effects on the macroeconomy by using the
aggregate demand-aggregate supply model. Be sure to indicate the
direction of change in real GDP, the price level and the
unemployment rate B. Illustrate the long run effects on the
macroeconomy by using the aggregate...
Price Level Aggregate Demand Short-Run Aggregate Supply 120
8,250 9,700 115 8,300 9,750 110 8,400 9,700...
Price Level Aggregate Demand Short-Run Aggregate Supply 120
8,250 9,700 115 8,300 9,750 110 8,400 9,700 105 8,500 9,600 100
8,600 9,500 95 8,700 9,300 90 8,800 8,800 85 8,900 8,000 80 9,100
7,000
Return to the original values of aggregate demand and short-run
aggregate supply. Assume potential GDP decreases to 7,000. Graph
the aggregate demand curve, short-run aggregate supply, and the new
potential GDP. Be sure to describe where the economy is operating
in the short-run relative to where...
QUESTION 7
The long-run aggregate supply curve intersects the horizontal
axis at the:
a- potential level...
QUESTION 7
The long-run aggregate supply curve intersects the horizontal
axis at the:
a- potential level of output.
b- expected rate of inflation.
c- current level of output.
d- actual rate of inflation.
QUESTION 8
If inflation is very high, say 50 or 100 percent a year,
monetary policymakers wishing to lower it will shift their focus to
controlling:
a- the short-term interest rate.
b- the exchange rate.
c- the long-term interest rate.
d- money growth.
QUESTION 9
Which of...
A. Aggregate Demand, Aggregate Supply, and
Equilibrium
For a hypothetical economy, the aggregate-demand
(AD), short-run aggregate...
A. Aggregate Demand, Aggregate Supply, and
Equilibrium
For a hypothetical economy, the aggregate-demand
(AD), short-run aggregate supply
(AS), and long-run aggregate-supply
(ASLR) schedules are as follows. The
schedules show the GDP price deflator (P) versus
real GDP (Q), with Q measured in
billions of constant dollars.
P
AD
AS
ASLR
80
30
22
30
90
28
24
30
100
26
26
30
110
24
28
30
120
22
30
30
130
20
32
30
A1. GRAPHS: Graph the AD,
AS,...
The aggregate-demand (AD), short-run aggregate supply (AS), and
long-run aggregate-supply (ASLR) schedules for a given
economy...
The aggregate-demand (AD), short-run aggregate supply (AS), and
long-run aggregate-supply (ASLR) schedules for a given
economy are as follows. The schedules show the GDP price index (P)
versus real GDP (Q), with Q measured in trillions of constant
(real) dollars. Note that ASLR is potential output
(Qf).
P
AD
AS
ASLR
60
7
1
3
90
6
2
3
120
5
3
3
140
4
4
3
160
3
5
3
170
2
6
3
1. Graph the AD, AS,...