Which of the following would cause a shift in the short-run aggregate supply curve, but no change in the long-run aggregate supply curve? an increase in the size of the labor force O an increase in the wage rate an increase in the quantity of capital O all of the above would shiftboththe long-run aggregate supply curve and the short-run aggregate suppl curve.
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- Startung trom keng run eaillium, itA suditen decrease en houtetd weath cnes a n AD thw coramy wiperience OA the same lee of pnces nd iower real GOP in the short run O higher pnces and lower real ODP the short. nn Oe. lower prles and lwe mal GOPhe shortrun a krwer ces and the same level of oDP n me shot runSuppose that in the year 2010, Celestial Electronics planned toproduce 950,000 units of its portable GPS devices. Of the950,000 it planned to produce, a total of 25,000 units wouldbe added to the inventory at its new plant in Florida. Alsoassume that these units have been selling at a price of $100each and that the price has been constant over time. Supposefurther that this year the firm built a new plant for $5 millionand acquired $2.5 million worth of equipment. It had noother investment projects, and to avoid complications,assume no depreciation.Now suppose that at the end of the year, Celestial had produced950,000 units but had only sold 900,000 units and that invento-ries now contained 50,000 units more than they had at thebeginning of the year. At $100 each, that means that the firmadded $5,000,000 in new inventory.a. How much did Celestial actually invest this year?b. How much did it plan to invest?c. Would Celestial produce more or fewer units next year? Whyciples of Macroeconomics || Fall20 1 What does the PPI measure? ed Select one: d out of O a the average change in the prices paid for all goods produced in the economy over a given year O b. the level of production of goods and services generated in the economy in a given year question O c. the difference between the prices consumers pay for goods and services and the prices producers pay for O d. the average of the prices received by producers of goods and services at all stages of the production pro Ti navigation Type here to search
- The economy has shifted and the quantity of the real GDP supplied has increased. What has potentially happened to aggregate price levels? Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper. O Potentially the price levels have decreased to a lower aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper. Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have fired some employees as labor has become too expensive.When there are no unplanned inventory changes, the economy in a short run equilibrium and in a long nun equilibrium O a may or may not be; is O b. is, is not Oc. is; may or may not be O d. is; is also Starting from a long run equilibrium, if a sudden decrease in household wealith causes a shift in AD, the economy will experience: O a. the same level of prices and lower real GDP in the short run. O b. higher prices and lowerreal GDP in the short run. O e. lower prices and lower real GDP in the short run Od. lower prices and the same level of GDP in the short run. Which of the following is NOT one af the reasons for the slow adjustment of input prices? O a. Menu costs Ob. Increased productivity Oc. Inventories Od. Long-term contractsFigure 11.2 shows the relationship between the price level and real GDP. Which of the following is the long-run equilibrium point? Figure 11.2 Price level O * O O e 52 V P₁ P₂ P3 0 A point between e* and e" Potential output LRAS e Q3 Q₂ Q₁ SRAS AD AD* AD' Real GDP (trillions of dollars)
- Short-run macroeconomic equilibrium is when (Hint: Be careful! Be sure to return to the general definition of equilibrium): Firms have no incentive to change how much they produce O Households have bought as much as they want O Spending is equal to consumption (AE = C) O The government is content with the level of employmentThe following graph shows an increase in aggregate demand (AD) in a hypothetical country. Specifically, aggregate demand shifts to the right from AD¡ to AD2, causing the quantity of output demanded to rise at all price levels. For example, at a price level of 140, output is now $400 billion, wwhere previously it was $300 billion. 170 100 150 140 130 120 AD2 110 AD, 100 00 + 100 200 300 400 500 00 700 800 OUTPUT (Billions of dollars) The following table lists several determinants of aggregate demand. Complete the table by indicating the change needed in each determinant to increase aggregate demand. Change Needed to Increase AD Wealth Тахes Expected rate of return on investment Incomes in other countries PRICE LEVELFor each of the three theories for the upward slopeof the short-run aggregate.supply curve, carefullyexplain the following:aA how the econom}' recovers from a recession andreturns to its long-run equilibrium without anypolicy interventionb. what determines the speed of that recovery
- 1dlankets F 360 320 G 280 240 200 ►K- 160 120 80 40 30 60 90 120 150 180 210 240 270 300 330 pillows Refer to the figure above. Which of the following could cause the economy's production to move from point H to point K? O a. an increase in unemployment in the economy O b.a shift in labor hours away from pillows towards blankets c. an increase in society's preferences for blankets O d. all of the above events (a - c) could cause this movementIn 2013, Prussia's aggregate demand curve was determined by the equation M + 1-4% A change in aggregate demand means that in 2014, Prussia's aggregate demand curve was determined by the equation Using this information, draw Prussia's old and new dynamic aggregate demand curves on the graph Which of the factors could have resulted in the change irn aggregate demand seen between 2013 and 2014? 13 AD 2013 an improvement in technology O an increase in imports O higher consumer confidence O a decrease in oil prices 12 AD 2014 10 8 5 4 3 2 4 -3 2 1 0 1 2 3 4 5 6 78 9 10 Real GDP growth rateIf Aggregate Demand is at AD2, production will be high as possible. Can production stay at this level foever? Price Level Price Level GDP POTENTIAL AD₁ GDP POTENTIAL AS GDP MAX AD₁ AS GDP MAX AD2 GDP AD2 GDP Select one: O a. No, because eventually, higher aggregate demand will raise prices, and this will make some people less willing to do additional work Oc. All of these are true Od. Yes, because this is maximum production e. None of these are true O b. No, because eventually higher aggregate demand will cause prices to fall, and this will make producers decide to produce less