Question

Which of the following statements is true? The intersection of the aggregate demand and aggregate supply...

Which of the following statements is true?

The intersection of the aggregate demand and aggregate supply curves determines the equilibrium price and quantity.
The aggregate demand curve indicates a positive relationship between the price level and GDP.
Other things equal, a downward shift of the aggregate demand curve implies that the economy enters an expansionary phase.
Aggregate demand and aggregate supply determine the equilibrium price and quantity of a single good.
The intersection of the aggregate demand and aggregate supply curves determines the equilibrium price level and the equilibrium level of real GDP.
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Option 5

The intersection of the aggregate demand and aggregate supply curves determines the equilibrium price level and the equilibrium level of real GDP

AD has a negative relationship with the price level and real GDP, and it is upward sloping, and it is the relationship between whole economic activities.

AS curve is upward sloping and has a positive relationship between price level and real output.

The intersection of AD-AS provides equilibrium actual real GDP and price level in the economy.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Suppose the government raises taxes. Which curves in the aggregate demand and aggregate supply model...
1. Suppose the government raises taxes. Which curves in the aggregate demand and aggregate supply model would be affected, and which way would they shift? 2.Other things the same, what happens in the short run to the price level and quantity of output when the aggregate demand curve shifts to the left? 3. A decrease in what variable will raise the quantity of goods and services supplied, and shift only the short run aggregate supply curve to the right?
Which of the following are determined by the intersection of aggregate demand and short run aggregate...
Which of the following are determined by the intersection of aggregate demand and short run aggregate supply? (Select all that apply) Select all that apply: Price level Inflation Real GDP Potential GDP
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,...
Assume a model with a downward-sloping aggregate demand curve and an upward-sloping aggregate supply curve. In...
Assume a model with a downward-sloping aggregate demand curve and an upward-sloping aggregate supply curve. In this model, a decrease in aggregate supply will lead to an increase in real GDP and a decrease in the price level. True or False
This question explores equilibrium in the aggregate demand and aggregate supply model. You will use schedules...
This question explores equilibrium in the aggregate demand and aggregate supply model. You will use schedules for an aggregate demand line and an aggregate supply line to identify the equilibrium price level and real GDP in a macroeconomy. Below, you are provided the schedules for an aggregate demand line and an aggregate supply line. Price Level (Consumer Price Index) Aggregate Demand Real GDP (billions of dollars) Aggregate Supply Real GDP (billions of dollars)    80 $11 $ 8    90...
1. the aggregate supply curve shows the negative relationship between general price and real GDP. True...
1. the aggregate supply curve shows the negative relationship between general price and real GDP. True or false 2. Other things equal, as the number of discouraged workers rises in an economy, the gap between potential and actual real GDP will widen. True or False 3. According to the expedenitures approach, gross domestic product represents the sum of consumption spending, government spending, net exports, and net investments. True or False 4. In a business cycle, a peak marks the end...
Using the concepts of aggregate demand and aggregate supply, explain how the economy reaches an equilibrium...
Using the concepts of aggregate demand and aggregate supply, explain how the economy reaches an equilibrium level of real GDP and price level.
Assume that the MPC is .8 in an economy that has an aggregate supply curve with...
Assume that the MPC is .8 in an economy that has an aggregate supply curve with a slope of 1. Also, suppose that the price level is flexible downward. A decrease in investment spending of $10 billion will shift the aggregate demand curve leftward by: (Show Steps) A. $50 billion and decrease real GDP by $50 billion. B. $50 billion and decrease real GDP by $25 billion.100% C. $10 billion and decrease real GDP by $10 billion.    D. $10 billion...
Use an aggregate supply-aggregate demand graph to illustrate the effects on real GDP and the price...
Use an aggregate supply-aggregate demand graph to illustrate the effects on real GDP and the price level of a fiscal stimulus when the economy is in recession (be precise in labeling the axes and curves).
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,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT