(Figure: Short-Run Equilibrium) Use Figure: Short-Run Equilibrium. The diagram indicates a short-run inflationary gap. The size of the inflationary gap is: Aggregate price level P₂ P1 Po O P2-P1. ○ Y₁ - YP. P₂-Po. P₁-Po. LRAS Yp Y₁ SRAS AD Real GDP
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- 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?If there is excess demand for goods and services in the economy at the current price level, then the: If there is excess demand for goods and services in the economy at the current price level, then the: A. price level will remain the same B. GDP will fall C. price level will increase D. price level will decreasePRICE LEVEL a a" a" LRAS Y, Y₂ QUANTITY OF OUTPUT 8 a. rising price level and a falling level of output, as the economy moves to point A. b. falling price level and a falling level of output, as the economy moves to point C. c. falling price level and a rising level of output, as the economy moves to point A O d. rising price level and a rising level of output, as the economy moves to point C. SRAS, SRAS Refer to Figure 34-3. Starting from point B and assuming that aggregate demand is held constant, in the long run the economy is likely to experience a AD
- Make the following calculations according to the table below. If you need, 2017 ● 2018 2019 2020 2021 Quantitiy Price Quantitiy Price Quantitiy Price Quantitiy Price Quantitiy Price Good A 6 2 4 10 6 5 8 4 Good B 2 5 8 4 6 4 6 68 2 26 6 Good C 8 1 10 3 4 2 10 a. Calculate nominal GDP, real GDP and GDP growing rates for all years. b. Calculate the inflation using the GDP deflator and Consumer Price Index(CPI) methods. Explain briefly, why inflation rates are different in these two calculations method. 20 8 3 use the year 2017 as the base year, the bundle consists of 3 Good A, 2 Good B and 4 Good Cdoes not increase output and employment but prices. O a. None of these O b. Inflationary gap O c. Deflationary gap O d. Equilibrium7. Draw the long-run aggregate supply curve when potential GDP is $17.5 trillion. Label it. As we move up along the long-run aggregate supply curve, A. the prices of goods and services increase and the mo OB. the money wage rate remains constant C. the real wage rate remains constant OD. the prices of goods and services remain constant 135- 125- 115- 105- 95- 85- 75- Price level (GDP deflator, 2009=100) 17.0 17.5 18.0 18.5 19.0 19.5 Real GDP (trillions of 2009 dollars) >>> Draw only the objects specified in the question. 16.5
- (Figure: Inflationary and Recessionary Gaps) Use Figure: Inflationary and Recessionary Gaps. Which equation measures an inflationary gap? LRAS Aggregate price level SRAS P3 AD3 Real GDP Y3-Y2 Y3 - Y₁ Y₂ - Y₁ Y3 - Yo P₂ P1 E₁ Y₁ Y₂ E₂ E3 AD₁ Y2Y3 AD₂R T 3. Price level B K SAS 1 SASO Real output C. an increase in aggregate demand. D. a decrease in aggregate demand. IUO Refer to the graph shown. A movement from A to C is most likely to be caused by: A. an increase in input prices. B. a decrease in input prices. NG1. Look at the figure. If the economy is in equilibrium at E and the government does not intervene, the result will likely be a shift of: Price level P2 g9 P1 LRAS YP Y1 Figure 1 SRAS 2 SRAS 1 AD1 Real GDP
- Suppose the U.S. Congress passes significant immigration reform that makes it more difficult for foreigners to come to the United States to work. Use the AD/AS model to explain how this would affect the equilibrium level of GDP and the puce level.1. Refer to the graph shown below. Which graph will lead to a lower real GDP and to pressure for a higher price level and inflation? Price Level D AD₂ AD LRAS Real GDP (a) Inflationary pressure hom a shit in AD A. Graph A B. Graph B C. None of the above D. Both graphs SRAS Price Level: Pa AD Y.Y. Real GDP (b) Inflationary pressure from a shift in AS LRAS SRAS, SRAS,How does an increase in the price level affect the quantity of real GDP supplied in the long run? OA In the long run, an increase in the price level will increase real GDP OB In the long run, an increase in the price level decreases inflation, which will decrease real GDP OC. In the long run, an increase in the price level increases inflation, which will decrease real GDP OD. Changes in the price level do not affect the level of GDP in the long run. CIDS Price level (GDP deflator) 123 113- 103- Long-Run Aggregate Supply LRAS2 LRAS2 LRAS23 Real GDP (trillions of $)