All of the following, except one, will cause an increase in both aggregate supply and long-run aggregate supply. Which is the exception? Oa. An increase in the capital stock Ob Technological improvement. Oc. An increase in human capital. Od. A decrease in factor prices G
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- Which of the following causes the short-run aggregate supply curve to shift to the right? O A. an increase in the expected price of an important natural resource B. a positive technological change OC. a higher expected future price level O D. a decrease in the capital stockThe economy has shifted and the quantity of the real GDP supplied has increased. What has potentially happened to aggregate price levels? Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper. O Potentially the price levels have decreased to a lower aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper. Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have fired some employees as labor has become too expensive.When there are no unplanned inventory changes, the economy in a short run equilibrium and in a long nun equilibrium O a may or may not be; is O b. is, is not Oc. is; may or may not be O d. is; is also Starting from a long run equilibrium, if a sudden decrease in household wealith causes a shift in AD, the economy will experience: O a. the same level of prices and lower real GDP in the short run. O b. higher prices and lowerreal GDP in the short run. O e. lower prices and lower real GDP in the short run Od. lower prices and the same level of GDP in the short run. Which of the following is NOT one af the reasons for the slow adjustment of input prices? O a. Menu costs Ob. Increased productivity Oc. Inventories Od. Long-term contracts
- Aggregate Demand is equal to nations aggregate output Select one: O a. False b. TrueThe economy is depicted in the graph to the right. a. Suppose, there are new discoveries of key raw materials. Which of the following best describes the result of this event? O A. The short-run aggregate supply curve shifts out while the long-run aggregate supply curve shifts in. OB. Both the short-run and long-run aggregate supply curves shift outward. OC. The short-run aggregate supply curve shifts inward while the long-run aggregate supply curve shifts outward. OD. Both the short and long-run aggregate supply curves shift inward. b. Complete the diagram. 1.) Using the line drawing tool, draw the new long-run aggregate supply curve representing this shock. Label it as LRAS,. 2.) Using the 3-point curved line drawing tool, draw the new SRAS representing this shock. Label it 'SRAS,'. Carefully follow the instructions above, and only draw the required objects. to search OWhich of the following will NOT shift the Long run Aggregate Supply (LAS) curve O an increase in the money wage rate. O a change in the capital stock. O technological progress. O an increase in the stock of human capital.
- Moving along the aggregate supply curve, O A. technology advances. B. the quantity of capital used increases. OC. the real wage rate is constant. O D. only the price level changes. O E. the stock of human capital increases.When would the long-run aggregate-supply curve shift right? Select one: O a. When immigration increases or the government abolishes the minimum wage. O b. When immigration decreases or the government makes a substantial increase in the minimum wage. O c. When immigration decreases or the government abolishes the minimum wage O d. When immigration increases or the government makes a substantial increase in the minimum wage.Determine 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 level (GDP price index, 2012 = 100) AD2 AD3 AD1 Real GDP (trillions of 2012 dollars)1200 1100 1000 900 800 700- 600 500 Price Level 400 300 200- 100 LRASI LRAS2 100 200 300 400 500 600 700 800 9001000 Real GDP What is a possible cause for the long run aggregate supply to shift from LRAS1 to LRAS2? O A decrease in capital. O A decrease in labor. O An increase in the fertility rate. O A global war.Consumer Spending increased by 5% last month. Based on this data, which of the following will likely occur in the next 3 -6 months? O GDP will increase O Unemployment will increase O The economy will enter a trough O Stagflation will occur
