Refer to the graph to the right. The shift from AS, to AS, shown in the diagram is referred to as a(n) AS, AS, O A. decrease in unit costs. OB. negative aggregate supply shock. O. positive aggregate supply shock. D. increase in unit costs. Real GDP Price Level
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- Refer to the graph to the right. The shift from AS, to AS₂ shown in the diagram is referred to as a(n) A. decrease in unit costs. B. increase in unit costs. O C. positive aggregate supply shock. OD. negative aggregate supply shock. *** Price Level P₂ points) possible A Real GDP AS₁ AS₂ 1The economy is depicted in the graph to the right. a. Suppose, there are new discoveries of key raw materials. Which of the following best describes the result of this event? O A. The short-run aggregate supply curve shifts out while the long-run aggregate supply curve shifts in. OB. Both the short-run and long-run aggregate supply curves shift outward. OC. The short-run aggregate supply curve shifts inward while the long-run aggregate supply curve shifts outward. OD. Both the short and long-run aggregate supply curves shift inward. b. Complete the diagram. 1.) Using the line drawing tool, draw the new long-run aggregate supply curve representing this shock. Label it as LRAS,. 2.) Using the 3-point curved line drawing tool, draw the new SRAS representing this shock. Label it 'SRAS,'. Carefully follow the instructions above, and only draw the required objects. to search OExplain the influence of the following events on the quantity of real GDP supplied and aggregate supply in India. When fuel prices rise When the price level in India increases A. short-run aggregate supply decreases; the quantity of real GDP supplied increases O B. long-run aggregate supply decreases; short-run aggregate supply increases OC. long-run aggregate supply increases; the quantity of real GDP supplied increases OD. short-run aggregate supply increases; the quantity of real GDP supplied decreases The graph gives the long-run aggregate supply curve and the short-run aggregate supply curve for India. Suppose Canadian firms move their call handling, IT, and data functions to India. The full-employment price level does not change. If long-run aggregate supply changes, draw the new long-run aggregate supply curve and label it. If short-run aggregate supply changes, draw the new short-run aggregate supply curve and label it. Draw a point at the full-employment price level at…
- Price level (GDP price index, 2012 = 100) AD2 AD3 AD1 Real GDP (trillions of 2012 dollars)Determine the effect on aggregate demand/ Short Run Agrregate supply of each of the followingevents. Explain whether it represents a movement along the aggregate demand/ Short run Aggregatesupply curve (up or down) or a shift of the curve (leftward or rightward).a) News of a worse-than-expected job market next yearb) A rise in the consumer price index (CPI) leads producers to increase output.c) A rise in legally mandated retirement benefits paid to workers leads producers to reduceoutput.d) As a result of an increase in the value of the dollar in relation to other currencies, Americanproducers now pay less in dollar terms for foreign steel, a major commodity used in production.e) An increase in the quantity of money by the Federal Reserve increases the quantity of moneythat people wish to lend, lowering interest rates.f) Greater union activity leads to higher nominal wages.g) A fall in the aggregate price level increases the purchasing power of households’ and firms’money holdings. As…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 contracts
- Assume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on:1. aggregate demand, 2. aggregate supply, 3. price level, and 4. real GDP. (a) An increase in government expenditure in infrastructureClick or tap here to enter text.(b) A severe recession occurs in a country, which has been a major importer of thenation’s exports.Click or tap here to enter text.(c) The federal government increases business taxesClick or tap here to enter text.(d) The Central Bank increases the cash interest rateans ences rations If in Year 1 the price level was 100 and real GDP was $20 trillion and in Year 2 the price level was 105 and real GDP was $21 billion, then the predominant change that occured in Year 2 was OA a decrease in aggregate demand. B. an increase (shift to the right) in short-run aggregate supply. OC. a decrease (shift to the left) in short-run aggregate supply OD. an increase in aggregate demand.If price level is held constant and we decrease consumption, the aggregate demand curve will shift to theSelect one:O a. NortheastO b. SouthwestO cc Neither A nor B
- Price Level LAS AS1 AD AS2 Real GDP Refer to the graph above to answer this question. If the economy was initially at point A, what would a movement to point B suggest? Select one: O a. The movement could be the result of an increase in nominal wages Ob. The movement could be the result of increased government spending. O c. The movement could be the result of an increase in aggregate demand. d. The movement could be the result of a decrease in the costs of production. ORefer to the figure to answer two questions. Price Level (average price) PE E a. How much output is unsold at the price level P₁? OD-S OS-QE 05-D₁ OQE-Di OP₁ b. At what price level is all output produced sold? OP₁-PE O PE+ P1 OPE Aggregate supply D₁ QE S₁ Real Output (quantity per year) Aggregate demandP4 AS2 AS, Aggregate output Y Figure 11.3 Refer to Figure 11.3. Hurricane Katrina destroyed a large portion of the infrastructure along the Gulf of Mexico coast. This caused Select one: a. the short-run aggregate supply curve to shift from AS 1 to AS 0- b. the short-run aggregate supply curve to shift from AS 1 to AS 2. c. the economy to move from Point C to Point B along AS 1. d. the economy to move from Point B to Point A along AS 1. Price level