Use the following information to draw aggregate demand (AD) and aggregate supply (AS) curves on the following graph.Price Level (average price)Price Level8001009008007006005004003002001000Output Demanded Output Supplied(Aggregate Demand) (Aggregate Demand)0$700Aggregate Supply and Demand100 200 300 300 500 600$800100700Real Output (quantity per year)800900ToolsADAS(↑) a. What is the equilibrium price level?$b. What curve (AD or AS) would have shifted if a new equilibrium were to occur at an output level of 600 and price level of $600?AD would have shifted to the right.AD would have shifted to the left.AS would have shifted to the left.AS would have shifted to the right.c. What curve would have shifted if a new equilibrium were to occur at an output level of 600 and a price level of $200?AD would have shifted to the right.AD would have shifted to the left.AS would have shifted to the left.O AS would have shifted to the right.

Equilibrium is achieved when the point of intersection between the aggregate supply curve and the…

Use the following information to draw aggregate demand (AD) and aggregate supply (AS) curves on the following graph. Price Level (average price) Price Level 800 100 900 800 700 600 500 400 300 200 100 0 Output Demanded (Aggregate Demand) 0 $700 200 Output Supplied (Aggregate Demand) Aggregate Supply and Demand 300 200 Real Output (quantity per year) $800 100 900 Tools AD AS

Use the following information to draw aggregate demand (AD) and aggregate supply (AS) curves on the following graph. Price Level (average price) Price Level 800 100 900 800 700 600 500 400 300 200 100 0 Output Demanded (Aggregate Demand) 0 $700 200 Output Supplied (Aggregate Demand) Aggregate Supply and Demand 300 200 Real Output (quantity per year) $800 100 900 Tools AD AS

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter8: Macroeconomic Equilibrium: Aggregate Demand And Supply

Section: Chapter Questions

Problem 11E

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Given AD 1and AS1, if the average price level in Figure 8.3 were at P3: Price Level P₁ 100 200 300 AS, AD, 400 Real Output (billions of dollars per year) AS, O The average price level would rise. The equilibrium price level would be P3. AD. A surplus would exist initially. The aggregate quantity demanded would exceed the aggregate quantity supplied.
Use graph A on the right to determine what happens to the equilibrium values of the price level and aggregate output when there is a decrease in the price of oil with no change in government spending. Graph A AS 1.) Using either the 3-point curved line drawing tool to shift the AS curve or using the line drawing tool to shift the AD curve, illustrate the impact of the decrease in the price of oil. Properly label your curve. 2.) Using the point drawing tool, identify the economy's new equilibrium point. Carefully follow the instructions above and only draw the required objects. AD Yo Aggregate output (income), Y Price level, P
The figure given below represents the equilibrium real GDP and price level in the aggregate demand and aggregate supply model Figure 8.3 U.S. Price Level B O AD, toAD; O AD, to AD₂ O AD₂ to AD₁ O AS, to AS; AS; to AS₂ 100 200 300 400 AS3 AS₁ AD₂ 500 Real GDP (billions of dollars) AD AS₂ AD3 In Figure 8.3, which of the following shifts would result in stagflation (economic stagnation and inflation)?
11. Which of he following statements accurately explain the scenario illustrated by these diagrams? a) Assuming ADo and AEo are the original positions of the AD and AE curves respectively, the original situation illustrated is on of a recessionary gap of 10. b) To restore full-employment equilibrium Aggregate Expenditures must be increased to AE1 which is equivalent to shifting the AD curve to AD1 c) Because the short-run Aggregate Supply (AS) curve is upward sloping, the shift in AD will be associated with some products price inflation. This will cause the AE curve to decline from AE1 to AE* because of the wealth, interest rate, and trade effects of inflation. d) All the above. e) Only (a) and (b) are true f) None of the above.
The following graph shows a decrease in aggregate demand (AD) in a hypothetical country. Specifically, aggregate demand shifts to the left from AD1AD1 to AD2AD2, causing the quantity of output demanded to fall at all price levels. For example, at a price level of 140, output is now $200 billion, where previously it was $300 billion. The following table lists several determinants of aggregate demand. Complete the table by indicating the change in each determinant necessary to decrease aggregate demand. Change needed to decrease AD Wealth (increase/ decrease) Taxes (increase/ decrease) Expected rate of return on investment (increase/ decrease) Incomes in other countries (increase/ decrease)
Which of the following is not a reason for the downward slope of the aggregate demand curve? As the price level decreases, the quantity demanded of real GDP increases. O As the price level decreases, American products are more attractive than imports, so their aggregate quantity increases. O As the price level decreases, the purchasing power of dollar decreases, so aggregate demand increases. O As the price level decreases, interest rates decrease, so consumption increases.
According to the "4-Quadrant Model" (4QM), which of the following statement is correct? O If there is a positive demand shock in the space market, the housing rent is going to increase in the short run, and will be lower than the current rent in the long run. If there is a positive demand shock in the space market, the housing price is going to decrease in the short run, and increase in the long run. If there is a positive demand shock in the asset market, the housing rent is going to decrease in the long run. O If there is a positive demand shock in the asset market, the housing price is going to decrease in the short run, and will be lower than the current price in the long run.
The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 140, and the quantity of output demanded is $300 billion. Moving down along the aggregate demand curve from point A to point B, the price level falls to 120, and the quantity of output demanded rises to $500 billion. 170 100 180 140 130 120 110 AD 100 00 100 200 300 400 B00 700 OUTPUT (Billians of dollars) As the price level falls, the cost of borrowing money will , causing the quantity of output demanded to Additionally, as the price level falls, the impact on the domestic interest rate will cause the real value of the dollar to in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will therefore and the number of foreign products purchased by domestic consumers and firms (imports) will Net exports will therefore causing the quantity of domestic output demanded to
Suppose that in 2011, the price of cotton, an input good, decreases in Microtania. Show how this event will change equilibrium output and price level by shifting either the SRAS or AD curve, and then answer the questions below. Did equilibrium output increase or decrease?Increase/Decrease Did equilibrium price increase or decrease?Increase/Decrease
Just solve questions 41-44, thank u! 30.A surplus of product will occur when price is: above equilibrium with the result that quantity demanded exceeds quantity supplied above equilibrium with the result that quantity supplied exceeds quantity demanded below equilibrium with the result that quantity demanded exceeds quantity supplied below equilibrium with the result that quantity supplied exceeds quantity demanded 31.Which of the following would decrease aggregate demand and shift the AD curve to the left? a decline in personal income tax rates a decline in consumer spending a higher level of government purchases a fall in interest rates 32.Which of the following is an implicit cost to the Johnston Manufacturing Company? payments of wages to its office workers property taxes rent paid for the use of equipment owned by the Schultz Machinery Company returns that the shareholders could have received if they had not bought shares in the Johnson Manufacturing Company…
The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 140, and the quantity of output demanded is $300 billion. Moving down along the aggregate demand curve from point A to point B, the price level falls to 120, and the quantity of output demanded rises to $500 billion. 170 160 150 140 130 120 110 AD 100 90 100 200 300 400 500 600 700 800 OUTPUT (Billions of dollars) PRICE LEVEL
The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 140, and the quantity of output demanded is $300 billion. Moving down along the aggregate demand curve from point A to point B, the price level falls to 120, and the quantity of output demanded rises to $500 billion. 170 160 150 A 140 130 B 120 110 AD 100 90 100 200 300 400 500 600 700 800 OUTPUT (Billions of dollars) As the price level falls, the cost of borrowing money will causing the quantity of output demanded to This phenomenon is known as the effect. Additionally, as the price level falls, the impact on the domestic interest rate will cause the real value of the dollar to in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will therefore and the number of foreign products purchased by domestic consumers and firms (imports) will Net exports will therefore causing the quantity of domestic output demanded to . This phenomenon…