Hand written solutions are strictly prohibited a. What is the equilibrium?A price level ofand real GDP of $b. Suppose that resource prices increase in the short run. Which curve will shift as a result?O Short-run aggregate supplyO Long-run aggregate supplyO Aggregate demandbillionc. Compared to the initial equilibrium, the new, short-run equilibrium will result in a:O lower price level and less real GDP.O lower price level, but increased real GDP.O higher price level and Increased real GDP.O higher price level, but less real GDP.d. What is the result of the shift to the new, short-run equilibrium?O Cost-push inflationO Demand-pull inflationO Resource gap Assume the economy is initially in both short-run and long-run equilibrium, as shown in the graph below.Price Level1301251201151101051009590858005AD and ASLRAS(20, 105)SRASReal GDP (billions of dollars)AD10 15 20 25 30 35 40 45 50 55O

When the total amount of output and the total amount of demand are equal, there is a short-term…

Answered: ce level of and real GDP of $ ose that…

ce level of and real GDP of $ ose that resource prices increase in the short run. Which curve will shift as a result? Short-run aggregate supply Long-run aggregate supply billion

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 1QR

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Question

Hand written solutions are strictly prohibited

a. What is the equilibrium?
A price level of
and real GDP of $
b. Suppose that resource prices increase in the short run. Which curve will shift as a result?
O Short-run aggregate supply
O Long-run aggregate supply
O Aggregate demand
billion
c. Compared to the initial equilibrium, the new, short-run equilibrium will result in a:
O lower price level and less real GDP.
O lower price level, but increased real GDP.
O higher price level and Increased real GDP.
O higher price level, but less real GDP.
d. What is the result of the shift to the new, short-run equilibrium?
O Cost-push inflation
O Demand-pull inflation
O Resource gap

Assume the economy is initially in both short-run and long-run equilibrium, as shown in the graph below.
Price Level
130
125
120
115
110
105
100
95
90
85
80
0
5
AD and AS
LRAS
(20, 105)
SRAS
Real GDP (billions of dollars)
AD
10 15 20 25 30 35 40 45 50 55
O

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