Question

7. Which of the following shifts the short-run aggregate supply curve right? both an increase in...

7. Which of the following shifts the short-run aggregate supply curve right?

  1. both an increase in the price level that is greater than expected and an increase in the

    expected price level.

  2. an increase in the price level that is greater than expected, but not an increase in the expected price level.

  3. an increase in the expected price level, but not an increase in the price level that is greater than expected.

  4. neither an increase in the price level that is greater than expected nor an increase in the expected price level.

why 4 is correct ?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The answer to the question is D- neither an increase in the price level that is greater than expected nor an increase in the expected price level.

In economics, the macroeconomic equilibrium is a state where aggregate supply equals aggregate demand.

In the short-run, examples of events that shift the aggregate supply curve to the right include a decrease in wages, an increase in physical capital stock, or advancement of technology. The short-run curve shifts to the right the price level decreases and the GDP increases. When the curve shifts to the left, the price level increases and the GDP decreases.

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 that there is an increase in the costs of production that shifts the short-run...
1. Suppose that there is an increase in the costs of production that shifts the short-run aggregate supply curve left. If there is no policy response, then eventually a. because unemployment is high, wages will be bid up and short-run aggregate supply will shift right. b. because unemployment is low, wages will be bid up and short-run aggregate supply will shift right. c. because unemployment is high, wages will be bid down and short-run aggregate supply will shift right. d....
Which of the following shifts aggregate demand curve to the right? An increase in the price...
Which of the following shifts aggregate demand curve to the right? An increase in the price level An increase in the money supply A decrease in the price level A decrease in the money supply
Which of the following will most likely increase long-run aggregate supply? a. an increase in the...
Which of the following will most likely increase long-run aggregate supply? a. an increase in the rate of investment b. an increase in resource prices c. an increase in the minimum wage d. an increase in the expected inflation rate Suppose the economy is initially in long-run equilibrium and then it experiences a supply shock in the form of sharply higher energy prices. Which of the following is true? a. The short-run aggregate supply curve shifts leftward and the long-run...
What is the effect of an adverse supply shock? a. The long-run aggregate supply curve shifts...
What is the effect of an adverse supply shock? a. The long-run aggregate supply curve shifts to the left. b. The short-run aggregate supply curve shifts to the right. c. The long-run Phillips curve shifts to the left. d. The short-run Phillips curve shifts to the right.
Assume that the long-run aggregate supply curve is vertical at Y = 3,000 while the short-run...
Assume that the long-run aggregate supply curve is vertical at Y = 3,000 while the short-run aggregate supply curve is horizontal at P = 1.0. Suppose that the country experiences an important crop failure due to severe tornadoes. What will be the immediate impact following the shock? Select one: a. the short-run aggregate supply curve shifts up, the price level rises, and output falls. b. the price level falls, output falls, and the short-run aggregate supply curve shifts down. c....
As the level of real GDP increases, the short-run aggregate supply curve: a. shifts to the...
As the level of real GDP increases, the short-run aggregate supply curve: a. shifts to the right. b. shifts to the left. c. becomes flatter. d. becomes steeper. e. becomes horizontal to the real GDP axis. Firms' profits or production do not increase in the long run because: a. some factors of production are fixed in the long run. b. all the factors of production are variable in the long run. c. changes in factor costs completely offset any change...
1.   Which one of the following shifts the aggregate demand curve leftward? Select one: a. An...
1.   Which one of the following shifts the aggregate demand curve leftward? Select one: a. An increase in the wage rate. b. An increase in the price level. c. An increase in expected deflation. d. A decrease in taxes. e. A decrease in the interest rate. 2.   Consider an economy starting from a position of full employment. Which one of the following changes does not occur as a result of an increase in aggregate demand? Select one: a. Real GDP...
1. Which of the following would shift the short-run aggregate supply curve to the right? A...
1. Which of the following would shift the short-run aggregate supply curve to the right? A change in the law requiring overtime pay for anyone working more than 30 hours a week A reduction in the minimum wage An increase in oil prices An increase in payroll taxes 2. The fact that investors can always hold cash creates: an upward bound on nominal interest rates. negative nominal interest rates. a problem for monetary policymakers when the short-term interest rates approach...
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,...
1.Which of the following shifts short-run aggregate supply left ? Select one: a. an increase in...
1.Which of the following shifts short-run aggregate supply left ? Select one: a. an increase in price expectations b. a decrease in the price of oil c. an increase in the actual price level d. a decrease in the money supply 2. The short-run effects of an increase in the expected price level include Select one: a. a lower level of output and a lower price level. b.a lower level of output and a higher price level. c. a higher...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT