What is the shape of Aggregate Supply curve in the short run and the reasons of the particular shape of the AS curve ? What are the reasons behind the shift of Aggregate supply curve ? And effect on the output and price level.
Q: Suppose the economy is in a long-run equilibrium, as shown in the following graph. Now suppose that…
A: The aggregate demand curve shows the negative relationship between price level and real GDP where…
Q: Suppose the price of a barrel of oil rose from US$100 to US$150. Use a basic aggregate demand and…
A: The entire quantity of products and services that enterprises are willing to sell at a given price…
Q: If Germany were to pass legislation that would make it easier for people to emigrate to Germany,…
A: The immigration policy would help more people to move into Germany. Hence, there would be an…
Q: the difference between the short-run aggregate supply curve and the long-run aggregate supply.
A: ANSWER the difference between the short-run aggregate supply curve and the long-run aggregate…
Q: 8. Economic fluctuations II The following graph shows the short-run aggregate supply curve (AS), the…
A: In the long run output remains at full employment, that at long run aggregate supply.
Q: terms of the aggregate supply curve, which of the following statements is true? Question 37…
A: Short run aggregate supply curve is always upward sloping because nominal wages are sticky and there…
Q: m price level will fall, and the equilibrium level of GDP will fall. B. Aggregate demand will…
A: 1. When consumers and businesses tend to have negative expectations about the future level of…
Q: you want, you can) TO MAKE EXPLANATION IS SO İMPORTANT.NOTE THAT: DESCRIPTION ≠
A: Aggregate supply or total output is the total supply of services and goods being produced at a given…
Q: 9. Economic fluctuations II The following graph shows the short-run aggregate-supply curve (AS), the…
A: Increase in world price increases cost of producing goods and services. Short aggregate supply is…
Q: What would be the effect of an unexpected increase in the price of oil on a graph showing aggregate…
A: In an economy, aggregate demand and aggregate supply curves are the graphical representation of the…
Q: The short-run aggregate supply curve: Ohas the same slope as the long-run aggregate supply curve…
A: The short run aggregate supply curve (SRAS) highlights the relationship between the aggregate price…
Q: End of Chapter 3.5a Ques The graph shows the economy in long-run equilibrium at point A. LRAS, SRAS,…
A: Long-run aggregate supply (LRAS):LRAS is a curve showing the relationship between the price level…
Q: In 2006, the economy of Aptonville had an aggregate demand and aggregate supply according to the…
A: Aggregate Demand (AD) is the total demand (dd) for all the goods (commodities) and services in an…
Q: In the long run, the aggregate supply curve: Slopes upward and to the right Slopes downward and to…
A: Aggregate supply refers to the total supply of goods and services in an economy over a given period,…
Q: Assume that Canada is initially in long run equilibrium with price level of P1 and GDP of Y1.…
A: 1. There is a sharp fall in Canada’s exchange rate A fall in the exchange rate will lead to economic…
Q: If the long run aggregate supply curve shifts, does the short run aggregate supply curve also have…
A: The short run aggregate supply slopes upwards while the long run supply curve is vertical. The long…
Q: Q35 The positive relationship between short-run aggregate supply and the price level indicates…
A: Aggregate supply curve is related to price and output. As money wage rate increases, aggregate…
Q: At full employment: O the aggregate demand curve is vertical O the long-run aggregate demand curve…
A: Long run market equilibrium or full employment level is a situation where long run aggregate supply…
Q: In the long run, the price level is determined by a. the short-run aggregate supply curve and…
A: In the long run, the price level is determined by the short-run aggregate supply curve and the…
Q: Create a graph for a short-run aggregate supply curve. Use the variable ‘Price Level’ for the…
A: Macroeconomics analyzes the economy as a whole. It studies aggregate economic concepts such as…
Q: why the aggregate supply curve slopes upward word in the short run
A: Aggregate supply curve is nothing but a a graphical representation of the relationship between the…
Q: Assume that Canada is initially in long run equilibrium with price level of P1 and GDP of Y1.…
A: Hi, thank you for the question. “Hey, since there are multiple sub-parts posted, we will answer the…
Q: On a short-run aggregate supply curve, wages tend to be sticky at levels of aggregate output and…
A: Short run refers to the time period where some of the factors of production remain same throughout…
Q: why the short run aggregate supply curve has a positive slope and the long run supply curve a…
A: The aggregate supply is the total supply of goods and services that firms in the economy willing to…
Q: Draw a graph that plots Short-run Aggregate Supply, Long.Run Aggregate Supply, and Aggregate Demand.…
A: Answer in Step 2
Q: Assume that the long-run aggregate supply curve is vertical at Y = 3.000 while the short-run…
A: Y=3000 Short run aggregate supply curve is horizontal at P= 1.0 Aggregate demand curve is; Y=2MP M=…
Q: Which of these does NOT cause shifts in short run aggregate supply (SRAS Nominal wages O Firms'…
A: Short run aggregate supply curve shows a positive relationship between price and output. It slopes…
Q: In the following figure, an economy is currently in short-run equilibrium at point a. What is likely…
A: SRAS is used to mention short-term aggregate supply, and LRAS is used to mention long-term aggregate…
Q: The following events have occurred in the history of the United States: A deep recession hits the…
A: If a deep recession hits the world economy then the demand for US exports will fall. As the exports…
Q: Suppose that firms become very pessimistic about future business conditions and cut heavily on…
A: Economics starts at E's long-term equilibrium. The balance level of GDP Qf and the equilibrium price…
Q: Part 1: Long-Run Self Adjustment- Draw a correctly labeled graph of aggregate demand, aggregate…
A: An increase in consumption spending increases aggregate demand, shifting AD curve rightward,…
Q: Refer to the diagram. The initial aggregate demand curve is AD1 and the initial aggregate supply…
A: The aggregate supply curve represents the total supply of goods and services by an economy at each…
Q: First the economy is on the point C. Explain the result of an increase in the money supply in the…
A: Aggregate demand and Aggregate Supply curves (both long run and short run) are important…
Q: 8. Economic fluctuations I The following graph shows the economy in long-run equilibrium at the…
A: Aggregate demand is a sum of consumption spending, investment spending, government purchases and net…
Q: A4
A: Aggregate Supply curve refers to the curve that shows the real output that all firms and producers…
Q: Create a graph with an aggregate demand curve and an aggregate supply curve in the short-run. Use…
A: The aggregate demand curve is a negatively sloped curve, which expresses the relationship between…
Q: Suppose that because of globally adverse meteorological conditions, there are serious concerns of…
A: The aggregate supply curve would shift leftward due to the change in price and aggregate output.
Q: Suppose the economy is in long-run equilibrium. a. Draw a diagram (graph) to illustrate the state…
A: a. The above graph shows that the economy is at full employment level because the short-run…
Q: hifts in the Aggregate Supply Curves List and discuss the things that will make the Short Run…
A: Supply shocks are occasions that shift the aggregate supply curve. We characterized the AS bend as…
Q: Suppose the government passes a law that significantly increases the minimum wage. The policy will…
A: Hi, thank you for the question. As per our Honor code, we are allowed to attempt only the first…
Q: Suppose the economy is in the long-run equilibrium. b. Now suppose war in the world's main oil-…
A: The economy is said to be in long-run equilibrium, when the real GDP is at its potential output, the…
Q: What assumptions cause the immediate-short-run aggregate supply curve to be horizontal? Why is the…
A: The aggregate supply refers to the total amount of all the goods, and services supplied by all the…
Q: Which of the following is an assumption of the aggregate demand-aggregate supply model? A. An…
A: When talking about aggregate demand and aggregate supply model, it is the model to represent the…
Step by step
Solved in 3 steps with 1 images
- Distinguish between a movement along the aggregate supply curve and a shift of the entire aggregate supply curve. What factors cause each to occur? Please include in your answer the COVID-19 impact in the economy.Suppose firms become very optimistic about future business conditions and invest heavily in new capital equipment. Show the short-run effect of this optimism on the aggregate-demand curve. Price Level LRAS Quantity of Output AS₂2 AS, The price level has risen. Wages are not sticky. AD₂ AD₁ Prices are sticky. People have misperceptions about the price level. Aggregate Demand Aggregate Supply LRAS Which of the following reasons could explain why the aggregate quantity of output supplied changes? Check all that apply. ?Which of the following are assumed to remain unchanged along a given short-run aggregate supply curve? Check all that apply. A. The position of the aggregate demand curve B. The price level C. Real GDP D. Input prices
- Which of the following causes the aggregate supply curve to shift inward? a. Increase in quantity of labor b. Increase in quantity of capital c. Decrease in GDP d. Decrease in price levelAssume the aggregate demand and aggregate supply curve intersect at a price level of 100. Explain the effect of a shift in the price level to 120 and to 50What effect will each shift have on price levels and quantities? Decrease in Aggregate Demand Decrease in Aggregate Supply
- Connect assignment O es Use the following information to draw aggregate demand (AD) and aggregate supply (AS) curves on the following graph. Output Demanded (Aggregate Demand) Output Supplied (Aggregate Demand) Price Level 600 100 Price Level (average price) Instructions: Use the tools provided 'AD' and 'AS' to plot the aggregate demand (AD) and aggregate supply (AS) curves. Plot only the endpoints of each line (plot 2 points for each line-4 points total). Both curves are assumed to be straight lines. 900 800 700 600 500 400 300 200 100 0 0 $700 100 Aggregate Supply and Demand 200 $800 100 900 900 900 900 90 900 900 700 Real Output (quantity per year) Instructions: Enter your response as a whole number. a. What is the equilibrium price level? $ Tools AD D AS e b. What curve (AD or AS) would have shifted if a new equilibrium were to occur at an output level of 600 and a price level of $600? O AS would have shifted to the right. O AS would have shifted to the left. O AD would have…Explain whether each of the following events will increase decrease or have no effect on long run aggregate supply a. the United States experiences as a wave of immigration b. Congress raises the minimum wage to $15 an hour c. Intel and Vince a new and more improved powerful computer chip d. a severe hurricane damage factories along the East CoastWhat would be the effect of an unexpected increase in the price of oil on a graph showing aggregate demand and short-run aggregate supply that is initially in equilibrium? The effect of an unexpected increase in the price of oil will be for the A. aggregate demand curve to shift down. B. aggregate demand curve to shift up. C. short-run aggregate supply curve to shift up. D. short-run aggregate supply curve to shift down. The new equilibrium will be where A. the new short-run aggregate supply curve interects the original aggregate demand curve. B. the original short-run aggregate supply curve interects the original aggregate demand curve. C. the new short-run aggregate supply curve interects the original short-run aggregate supply curve. D. the new short-run aggregate supply curve interects a new aggregate demand curve.
- 7. Determinants of aggregate supply The following graph shows an increase in short-run aggregate supply (AS) in a hypothetical economy where the currency is the dollar. Specifically, the short-run aggregate supply curve shifts to the right from AS₁ to AS2, causing the quantity of output supplied at a price level of 100 to rise from $200 billion to $250 billion. PRICE LEVEL 200 175 150 125 100 75 50 25 0 + AS₁ AS 2 ?why the short run aggregate supply curve has a positive slope and the long run supply curve a vertical line.The following event has occurred in the history of the United States: The world oil price rises sharply. Explain for event whether it changes short-run aggregate supply, long-run aggregate supply, aggregate demand, or some combination of them.
