The long run aggregate supply curve (LRAS) has a verticle slope indicating that changes in the price level have no effect on long run supply. This feature is consistent with which of the following theories. sticky price theory liquidity theory the classical dichotomy the invisible hand
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The long run
aggregate supply curve (LRAS) has a verticle slope indicating that changes in the price level have no effect on long run supply. This feature is consistent with which of the following theories.sticky price theory
liquidity theory
the classical dichotomy
the invisible hand
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- Which of the following does not shift the long-run aggregate supply curve to the right? Group of answer choices A) an increase in the money growth rate. B) an increase in human capital. C) an increase in capital stock. D) improved technology.If an economy's short-run equilibrium output (i.e., the output level associated with the Short Run Aggregate Supply Curve intersects the Aggregate Demand Curve) Is currently lower than long-run equilibrium output, then the economy Is most likely in aln): Budget deficit Inflationary gap Recessionary gap Contractionary monetary policyIn the sticky-price model, describe the aggregate supply curve in the following special cases. How do these cases compare to the short-run aggregate supply curve we discussed in Chapter 10? All firms have sticky prices (s = 1). The desired price does not depend on aggregate output (a = 0).
- Coronavirus pandemic and resultant shutdown measures to contain it have plunged the economies around the world including Singapore into severe contraction. Assuming Singaporean economy was in long run equilibrium in the aggregate demand and supply (AD-AS) model before the pandemic (and consequent shutdown) started, answer the questions below: a) Assuming the contraction in the Singaporean economy is mainly driven by demand side factors, Show the short-run effects of this using the AD-AS model. Carefully explain in words (100 or less). Graph Explanation b) Now assume that the contraction in the Singaporean economy is mainly driven by supply side factors, Show the short-run effects of this using the AD-AS model. Carefully explain in words (100 or less). Graph Explanation [1] Make sure to label the variables represented on the X-axis and Y-axis of the graph clearly. Also mark the curves in the graphs clearly…Coronavirus pandemic and resultant shutdown measures to contain it have plunged the economies around the world including Singapore into severe contraction. Assuming Singaporean economy was in long run equilibrium in the aggregate demand and supply (AD-AS) model before the pandemic (and consequent shutdown) started, answer the questions below: a) Assuming the contraction in the Singaporean economy is mainly driven by demand side factors, Show the short-run effects of this using the AD-AS model. Carefully explain in words (100 or less). Graph ExplanationCoronavirus pandemic and resultant shutdown measures to contain it have plunged the economies around the world including Singapore into severe contraction. Assuming Singaporean economy was in long run equilibrium in the aggregate demand and supply (AD-AS) model before the pandemic (and consequent shutdown) started, answer the questions below: a) Assuming the contraction in the Singaporean economy is mainly driven by demand side factors, Show the short-run effects of this using the AD-AS model. Carefully explain in words (100 or less) and using a graph. b) Now assume that the contraction in the Singaporean economy is mainly driven by supply side factors, Show the short-run effects of this using the AD-AS model. Carefully explain in words (100 or less) and using a graph.
- Coronavirus pandemic and resultant shutdown measures to contain it have plunged the economies around the world including Singapore into severe contraction. Assuming Singaporean economy was in long run equilibrium in the aggregate demand and supply (AD-AS) model before the pandemic (and consequent shutdown) started, answer the questions below: a) Assuming the contraction in the Singaporean economy is mainly driven by demand side factors, Show the short-run effects of this using the AD-AS model. Carefully explain in words b) Now assume that the contraction in the Singaporean economy is mainly driven by supply side factors, Show the short-run effects of this using the AD-AS model. Carefully explain in words c) Which of the above mentioned two recessions scenarios, is more challenging for the policy makers to deal with (the government and the central bank)? and why?According to the model of aggregate supply and aggregate demand, in the long run, an increase in the money supply should cause a) prices to fall and output to remain unchanged. b) prices to rise and output to remain unchanged. c) prices to rise and output to rise d) prices to fall and output to fallConsider the three theories of the upward slope of the short-run aggregate-supply curve. According to the sticky-wage theory, the economy recovers from a recession as nominal wages are adjusted so that real wages . True or False: According to the sticky-price theory, the economy is in a recession because people expect prices to rise quickly in a recession. True False True or False: According to the misperceptions theory, the economy is in a recession when the price level is above what was expected. True False
- In Keynesian theory, why is the aggregate supply curve horizontal in the short run? Select one: Interest rates are assumed fixed in the short run Prices are assumed fixed in the short run Aggregate demand is assumed fixed in the short run Output is assumed fixed in the short runIn the sticky-price model, if no firms have rexible prices, the short-run aggregate supply schedule will: be vertical. be steeper than it would be if some firms had flexible prices. slope upward to the right. be horizontal.the misperceptions theory of the short run aggregate supply curve says that if the price level is higher than people expected then some firms believe that the relative price of what they produce has decreased and so they increase production decreases so they decrease produciton increased so they increase production increased so they decrease production