If the value of the $NZ increases then the price level will A. rise or fall depending on whether the AD or SAS curve shifts more. b.fall. c. remain unchanged D. rise
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If the value of the $NZ increases then the price level will
A. rise or fall depending on whether the AD or SAS curve shifts more.
b.fall.
c. remain unchanged
D. rise
Step by step
Solved in 2 steps
- Which of the following will NOT shift the AD curve? O a. Changes in consumer confidence O b. Changes in autonomous exports O c. Changes in government expenditure O d. Changes in the inflation rate ?Use the following graph to answer the next question. AS, Price Level CF E Multiple Choice AS O. A B C Real Domestic Output A shift of the aggregate demand curve from AD₁ to ADo might be caused by a(n) AD₁ Increase in aggregate supply. AD decrease in the amount of output suppiled. Increase in Investment spendling. decrease in net export spending.1. Which of the following could cause a shift from AD to AD₁, ceteris paribus? PRICE LEVEL a a Figure 10.1 REAL OUTPUT ($ billions per year) B) an increase in exports A) a decrease in investment AD OC) an increase in consumer confidence OD) an increase in consumption AS 4
- Which of the following would NOT cause a shift in AD? Select one: a. A reduction in interest rates b. A fall in the cost of production c. A reduction in income tax d. An increase in government spendingAn important assumption in the AD/AS macro model is that when real GDP exceeds potential output, factor prices rise and the AD curve shifts to the right. O AD curve shifts to the left rapidly. O AS curve shifts to the right very rapidly. AS curve shifts to the left.4. The price rose. How would it change the investment: Decrease or Increase? How would it shift the AD curve: Leftward, Rightward or No shift? Investment: Shift of AD:
- All other things being equal, an decrease in the oil price will cause the AD to shift up to the right. O the AS curve to shift down to the right. a down movement along the AS curve. the AD curve to shift down to the left.Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point W. The price level is Po Now, suppose there is an exogenous rise in the price level to P₁. Which of the following statements describes the likely macroeconomic effects? OA. The AE curve shifts to AE2, a new equilibrium is established at point V, and the AD curve shifts from AD to AD, and equilibrium moves from point D to point B. OB. The AE curve shifts to AE₁, a new equilibrium is established at point U, and the economy moves from point D to point A along AD C. The AE curve shifts to AE2, a new equilibrium is established at point V, and the economy moves from point D to point G along AD OD. The AE curve shifts to AE₁, a new equilibrium is established at point U, and the AD curve shifts from AD to AD¹, and equilibrium from point D to point B. CITO Desired Aggregate Expenditure Price Level 459 W. Yo Real GDP A PoC P2F AE=Y AE₂ B DE Y₁ Yo Y₂ Real GDP AEO AE₁ AD ADO3. The graph below shows the AD-AS model for the US in long-run equilibrium. Label both axes and the following: AD, SRAS, LRAS. Indicate the equilibrium price level is P, and equilibrium level of output is Yo. X Assume that due to an expansion in European economics, US exports to that region increase. A. Show the effects of this change in the graph above. B. What happens to the SR equilibrium price level and level of output (Real GDP)? Label these P₁ and Y₁. C. Initially, what happens to real wages? D. What happens to the unemployment rate? E. Given your answer to parts C and D, how might workers respond? F. Show the effects of the change described in part E in the graph above. Label the new equilibrium price level and level of output as P₂ and Y₂. G. After this transition to the LR equilibrium, what is the level of output (Y₂) as compared to the initial level (Yo)?
- Refer to the figure. Suppose the current aggregate demand is represented by AD2. If aggregate demand falls to line AD3, then A. the new equilibrium real Gross Domestic Product (GDP) will be x. B. a new price level will be established at a. C. the new equilibrium will be at k. D. the new equilibrium will be at j.Consider the AD/AS model. An increase in government purchases will change equilibrium real GDP but have no impact on equilibrium price level if A. the simple multiplier is very large. OB. the AS curve is horizontal. OC. the AS curve is vertical. OD. the simple multiplier is very small. ™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
