Choose the correct sequence of events that might bring an economy to full employment if it is currently at a level of real GDP above the potential level of GDP. Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b FEN.06 Homework Unanswered Due Mar 17th, 11:59 PM C d price level goes up, lowering wages and increasing output price level goes up, increasing wages as well as output wages rise, increasing prices and decreasing output wages fall, decreasing prices as well as output →

Choose the correct sequence of events that might bring an economy to full employment if it is currently at a level of real GDP above the potential level of GDP. Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b FEN.06 Homework Unanswered Due Mar 17th, 11:59 PM C d price level goes up, lowering wages and increasing output price level goes up, increasing wages as well as output wages rise, increasing prices and decreasing output wages fall, decreasing prices as well as output →

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 61P: Table 24.4 describes Santhers economy. Plot the AD/AS curves and identify the equilibrium. Would you...

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The following graph shows the aggregate demand (AD1) and aggregate supply (AS) curves for a hypothetical economy with full-employment output of $11 trillion. PRICE LEVEL of 130 125 120 115 110 105 100 95 90 8.0 8.5 9.0 AD1 AS AD2 Macro Eq 2 9.5 10.0 10.5 11.0 11.5 12.0 REAL GDP (Trillions of dollars) Help Clear All Suppose the level of real GDP supplied by firms is $10.5 trillion and the price level is 105. In this case, the quantity of real GDP supplied is the real GDP demanded at a price level of 105, and firms will experience an unplanned in inventories. Firms will respond to the change in inventories by producing output until the economy reaches macroeconomic equilibrium at a price level of and real GDP Suppose consumers and businesses become more optimistic about future economic conditions, causing the aggregate demand curve to increase by $0.5 trillion at each price level. Use the green line (triangle symbols) to show the new aggregate demand curve (AD2). Be sure that AD2 is…
Table 24.4 describes Santhers economy. Plot the AD/AS curves and identify the equilibrium. Would you expect unemployment in this economy to be relatively high or low? Would you expect prices to be a relatively large or small concern for this economy? Imagine that input prices fall and so AS shifts to the right by 150 units. Identify the new equilibrium. How will the shift in AS affect the original output, price level, and employment?
If new government regulations require firms to use a cleaner technology that is also less efficient than what they previously used, what would the effect be on output, the price level, and employment using the AD/AS diagram?
Briefly explain the reason for the near-horizontal shape of the SRAS curve on its far left.
What is the intermediate zone of the SRAS curve? Will a rise in output be accompanied by a rise or a fall in the price level in this zone?
What is on the horizontal axis of the AD/AS diagram? What is on the vertical axis?
Suppose the Federal Reserve begins to Increase the supply of money at an Increasing rate. What Impact would that have on GDP, unemployment, and inflation?
How would a dramatic increase in the value of the stock market shift the AD curve? What effect would the shift have on the equilibrium level of GDP and the price level?
Suppose concerns about the size of the federal budget deficit lead the U.S. Congress to cut all funding for research and development for ten years. Assuming this has an impact on technology growth, what does the AD/AS model predict would be the likely effect on equilibrium GDP and the price level?
What is the economic reason why the SRAS curve slopes up?
R The model of aggregate demand/aggregate supply... O Identifies the equilibrium GDP and price level as well as the gap between the equilibrium GDP and the potential GDP Identifies the potential GDP and price level as well as the gap between the price level and the inflation. O Identifies the equilibrium GDP the economy will reach in the long A run O Identifies the equilibrium quantity and price for consumer goods 10 % 5 T 6 O Y Com liji fa 887 & 7 7 U 8 4 f10 num lk. 8 ( 5 9 開

In 2013, Prussia's aggregate demand curve was determined by the equation M + 1-4% A change in aggregate demand means that in 2014, Prussia's aggregate demand curve was determined by the equation Using this information, draw Prussia's old and new dynamic aggregate demand curves on the graph Which of the factors could have resulted in the change irn aggregate demand seen between 2013 and 2014? 13 AD 2013 an improvement in technology O an increase in imports O higher consumer confidence O a decrease in oil prices 12 AD 2014 10 8 5 4 3 2 4 -3 2 1 0 1 2 3 4 5 6 78 9 10 Real GDP growth rate