Answer in all option Explain how each of the following events would affect the long-run aggregate supply curvea. The price level increases.Because this is a change inthe LRAS curve willb. The labor force increases.Because this is a change inthe LRAS willc. There is an increase in the quantity of capital goodsBecause this is a change inthe LRAS willd. Technological change occursBecause this is a change inthe LRAS will

a. The price level increases.Because this is a change in: The price level.The LRAS curve will not…

Answered: Explain how each of the following…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 15QP

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Explain whether each of the following events shiftsthe short-run aggregate-supply curve, the aggregatedemand curve, both, or neither. For each event thatdoes shift a curve, draw a diagram to illustrate theeffect on the economy.a. Households decide to save a larger share of theirincome.b. Florida orange groves suffer a prolonged period ofbelow-freezing temperatures.c. Increased job opportunities overseas cause manypeople to leave the country.
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.
Which of the following causes the short-run aggregate supply curve to shift to the right? A. a positive technological change B. an increase in the expected price of an important natural resource C. a higher expected future price level D. a decrease in the capital stock Which of the following causes the short-run aggregate supply curve to shift to the left? A. an increase in the labor force B. an increase in productivity OC. an increase in the expected price of an important natural resource D. a positive technological change
The graph to the right shows an economy's aggregate demand curve. Show the determination of the economy's long-run macroeconomic equilibrium by (i) using the Line tool to draw and label the long-run aggregate supply curve to show an equilibrium and (ii) using the Point tool to identify the equilibrium point. Label this point E. Price level Real GDP AD E
Explain why the following statements are false.a. “The aggregate-demand curve slopes downwardbecause it is the horizontal sum of the demandcurves for individual goods.”b. “The long-run aggregate-supply curve is verticalbecause economic forces do not affect long-runaggregate supply.”
Only a change in the price level can cause shifts in both the aggregate expenditure line and the aggregate demand curve. a. True b. False
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 level
For each of the following, please explain each step and show it in the graph! a. Assume an economy is at full employment, but then consumer spending rises. What will most likely happen in the short run?
The short run aggregate supply curve was constructed assuming that as the price of outputs increases, the puce of inputs stays the same. How would an increase in the prices of important inputs, like energy, affect aggregate supply?
How does an increase in the price level affect the quantity of real GDP supplied in the long run? OA In the long run, an increase in the price level will increase real GDP OB In the long run, an increase in the price level decreases inflation, which will decrease real GDP OC. In the long run, an increase in the price level increases inflation, which will decrease real GDP OD. Changes in the price level do not affect the level of GDP in the long run. CIDS Price level (GDP deflator) 123 113- 103- Long-Run Aggregate Supply LRAS2 LRAS2 LRAS23 Real GDP (trillions of $)

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