7. As shown in the diagram to the right, the short-run aggregate supply curve (AS) is upward-sloping. This positive slope is explained in part by the fact that A. input price increases cause firms to raise their prices. B. in the short-run, output prices are slower to adjust to increasing aggregate demand than are input prices. C. in the short-run, input prices particularly wage rates-are slower to adjust to increasing aggregate demand than are output prices. D. business owners are more intelligent than other resource owners. A. The AS curve shifts rightward. B. The AS curve remains unchanged. C. The AS curve becomes horizontal. D. The AS curve shifts leftward. Price level, P 8. How would the following event impact the economy's short-run aggregate supply (AS) curve? Event: High taxes and excessive regulation cause firms to reduce the quantity of their physical capital. Aggregate output (income), Y A. increase and therefore shift to the left B. increase and therefore shift to the right C. decrease and therefore shift to the right D. decrease and therefore shift to the left AS 9. A negative supply shock, such as an increase in oil prices, causes the short-run aggregate supply curve to

7. As shown in the diagram to the right, the short-run aggregate supply curve (AS) is upward-sloping. This positive slope is explained in part by the fact that A. input price increases cause firms to raise their prices. B. in the short-run, output prices are slower to adjust to increasing aggregate demand than are input prices. C. in the short-run, input prices particularly wage rates-are slower to adjust to increasing aggregate demand than are output prices. D. business owners are more intelligent than other resource owners. A. The AS curve shifts rightward. B. The AS curve remains unchanged. C. The AS curve becomes horizontal. D. The AS curve shifts leftward. Price level, P 8. How would the following event impact the economy's short-run aggregate supply (AS) curve? Event: High taxes and excessive regulation cause firms to reduce the quantity of their physical capital. Aggregate output (income), Y A. increase and therefore shift to the left B. increase and therefore shift to the right C. decrease and therefore shift to the right D. decrease and therefore shift to the left AS 9. A negative supply shock, such as an increase in oil prices, causes the short-run aggregate supply curve to

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter33: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 5PA

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Describe the mechanism by which supply creates its osi1 demand.
10. Great Depression In 1939, with the U.S. economy not yet fully recovered from the Great Depression, President Roosevelt proclaimed that Thanksgiving would fall a week earlier than usual so that the shopping period before Christmas would be longer. Graph A Graph B LRAS Aggregate Supply Aggregate Demand Price Level LRAS Quantity of Output Price Level Aggregate Supply Aggregate Demand Quantity of Output
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> A Moving to another question will save this response. Question 24 One of the most important views expressed by classical macroeconomisls was thal O A. wages and prices are always rising. O B. supply creales its own demand. O C. wages and prices are inflexible. O D.demand creates its own supply. A Moving to another question will save this response.
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In the market for a nonrenewable natural resource, the equilibrium price is the price that gives suppliers an expected profit equal to the The equilibrium quantity is OA. interest rate; constantly decreasing OB. inflation rate; constantly decreasing C. inflation rate; equal to zero in the long run D. inflation rate; the quantity demanded at that price E. interest rate; the quantity demanded at that price J % 5 6 3 Oll & 7 8 9 0 Next T tact L +
6. Why the aggregate supply curve slopes upward in the short run In the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen. For example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to the natural level of output in…
6. Why the aggregate supply curve slopes upward in the short run In the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen. For example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to the natural level of output in…
(Figure: Short- and Long-Run Equilibrlum I) Use Figure: Short- and Long-Run Equlibrium . If the economy le short-run maroeconomio wqbrum tE. appropriate polkcy to retum the economy to potential output would be atn): LRAS price l SRAS AD Real GDP potential output Oa decrease in taxes. Ob increase in government spending. Oc increase in transfer payments. Od. decrease in government spending.