Please highlight which of the choices is the right one, I believe it is d but would like some conformation. If you can please also explian why the other choices are wrong
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Please highlight which of the choices is the right one, I believe it is d but would like some conformation. If you can please also explian why the other choices are wrong
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- A long-run equilibrium occurs when aggregate demand and aggregate supply are in equilibrium ____ a) below potential output b) at potential output c) above potential output d) at any level of outputAssume that aggregate demand is unaffected by the gas tax holiday. After the economy has fully adjusted to the gas tax holiday, the long-run effect is (an increase, no change, a decrease) in aggregate output and (an increase, no change, a decrease) in the price level.The short-run quantity of output supplied by firms will exceed the natural level of output when the actual price level ———-that people expected.
- The U.S. macroeconomy is in a short-run equilibrium at Q1 and P1. What is going to happen in the long-run? P Р1 QN Q₁ SRAS1 AD Q This is a diagram with price on the vertical axis and quantity on the horizontal axis. There is a place marked on the horizontal axis with a QN. There is an upward sloping line labelled SRAS and a downward sloping line labelled AD. The place these two lines intersect is labelled Q1 on the horizontal axis and P1 on the vertical axis. Q1 is to the right of QN. O The aggregate demand curve will shift left leading to falling prices and falling output. O SRAS curve will shift left leading to rising output and rising prices. OSRAS curve will shift left leading to rising prices and falling output.An increase in worker productivity/output per hour will shift the short run aggregate supply curve to the right True / FalseA shock to aggregate supply will have different outcomes when there are different assumptions about the formation of the level of expected inflation. One path assumes that the level of expected inflation equals lagged inflation. The level of expected inflation changes over time. The second path assumes the level of expected inflation is anchored to a specific value and never changes. Begin in medium-run equilibrium where actual and expected inflation equal 2% in period t. Suppose the economy is at initial equilibrium at point A, as shown in the graph on the right, and there is a permanent increase in the price of oil in period t + 1. How does the Phillips curve shift? 1.) Using the 3-point curved line drawing tool, draw a new Phillips curve that reflects the permanent increase in oil prices. Label your line appropriately. 2.) Using the point drawing tool, indicate where the short-run equilibrium would be as a result of the increase in oil prices. Label your point 'A". 3.) Using the…
- The following events have occurred in the history of the United States: A deep recession hits the world economy. The world oil price rises sharply. S. businesses expect future profits to fall. Explain the separate effects of each event on U.S. real GDP and the price level, starting from a position of long-run equilibrium.Assume that aggregate demand is unaffected by the oil price spike. After the economy has fully adjusted to the oil price spike, the long-run effect is (no change, an increase, a decrease) in aggregate output and (no change, an increase, a decrease) in the price level.Which of the following changes will have the smallest impact on the aggregated demand in the short-run? Group of answer choices A decrease in taxes of $100 An increase in government spending of $100 An increases in exports of $100 A decrease in savings of $100
- Starting from a long run equilibrium, without any policy intervention, the long run impact of a temporary adverse supply shock is that prices will: a. be permanently higher and output will be restored to its long run level. b. return to the old level and output will be permanently lower. c. return to the old level and output will be restored to its long run level. d. be permanently higher and output will be permanently loweAs described in the chapter, the Federal Reserve in 2008 faced a decrease in aggregate demand caused by the housing and financial crises and a decrease in short-run aggregate supply caused by rising commodity prices. Starting from a long-run equilibrium, illustrate the effects of these two changes on aggregate supply and aggregate demand on the following graph. Then, on the subsequent graph, indicate what happens on a Phillips-curve diagram. Price Level Inflation Rate LRAS Aggregate Supply LRPC Aggregate Demand Quantity of Output Unemployment Rate SRPC Aggregate Demand Aggregate Supply LRAS Long-run Equilibrium SRPC LRPC + Long-Run EquilibriumThe figure to the right shows an economy in an initial long-run equilibrium at point A a. Using the line drawing tool, show how, if at all, the equilibrium real GDP and the long-run equilibrium price level are affected by an income tax rebate (the return of previously paid taxes) from the government to households, which they can apply only to purchases of goods and services. Properly label this line. Carefully follow the instructions above, and only draw the required objects b. According to your graph, the equilibrium price level here to search O while the equilibrium real GDP ▼
