Answer both sub parts Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. Suppose an economy is in an initial short-run equilibrium at a point where aggregate demand intersectsshort-run aggregate supply.Which of the following best illustrates cost-push inflation?OA. A rightward shift of the aggregate demand curve.B. A rightward shift of the short-run aggregate supply curve.C. A leftward shift of the short-run aggregate supply curve.D. A leftward shift of the aggregate demand curve. Which of the following is most likely to cause the cost shock that shifts the AS curve consistent withcost-push inflation?A. A surge in the price of crude oil.B. A flood of new immigrants.C. A tax increase on households.D. An increase in the size of government.

A complicated economic issue, inflation affects people and the economy in many ways. Maintaining a…

short-run aggregate supply. Which of the following best illustrates cost-push inflation? OA. A rightward shift of the aggregate demand curve. O B. A rightward shift of the short-run aggregate supply curve. OC. A leftward shift of the short-run aggregate supply curve. OD. A leftward shift of the aggregate demand curve.

short-run aggregate supply. Which of the following best illustrates cost-push inflation? OA. A rightward shift of the aggregate demand curve. O B. A rightward shift of the short-run aggregate supply curve. OC. A leftward shift of the short-run aggregate supply curve. OD. A leftward shift of the aggregate demand curve.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 2CQQ

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Refer to the given figure. Inflation T 000 LRAS Y' B U AD Output This economy has a short-term equilibrium at point A. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as SRAS aggregate demand shifting rightward. aggregate demand shifting leftward. O short-run aggregate supply shifting downward. long-run aggregate supply shifting leftward.
Which of the following is consistent with the theory of aggregate supply? a. An increase in the expected price level shifts the short-run aggregate-supply curve to the left, and an increase in the actual price level shifts the short-run aggregate supply to the left. b. An increase in the expected price level shifts the short-run aggregate-supply curve to the right, and an increase in the actual price level shifts the short-run aggregate supply to the right. c. An increase in the expected price level shifts the short-run aggregate-supply curve to the left, and an increase in the actual price level does not shift the short-run aggregate supply. d. An increase in the expected price level shifts the short-run aggregate-supply curve to the right, and an increase in the actual price level does not shift the short-run aggregate supply. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of…
What is the primary cause of demand-pull inflation? an event that causes the short-run aggregate supply curve to shift right O an event that causes the short-run aggregate supply curve to shift left an event that causes the aggregate demand curve to shift right an event that causes the aggregate demand curve to shift left
2. Suppose that the economy is in a long-run equilibrium. a. Use a diagram to illustrate the state of the economy. Be sure to show aggregate demand, short-run aggregate supply, and long-run aggregate supply. b. Now suppose that a stock market crash causes aggregate demand to fall. Use your diagram to show what happens to output and the price level in the short run. What happens to the unemployment rate? c. Use the sticky-wage theory of aggregate supply to explain what will happen to output and the price level in the long run (assuming there is no change in policy). What role does the expected price level play in this adjustment? Be sure to illustrate your analysis in a graph.
Which of the following statements are true? Which are false? Explain why the false statements are untrue.a. Short-run aggregate supply curves reflect an inverse relationship between the price level and the level of real output.b. The long-run aggregate supply curve assumes that nominal wages are fixed.c. In the long run, an increase in the price level will result in an increase in nominal wages.
Based on the given figure, the economy is initially in long-run equilibrium at point A. If there is a favorable supply shock that increases potential output and shifts the long- run aggregate supply curve from LRAS to LRAS', then there is initially gap and the short-run aggregate supply curve will Inflation P 24 A B LRAS LRAS D E Y* Output Y' SRAS' SRAS SRAS AD a. an expansionary: eventually shift to SRAS" b. an expansionary; eventually shift to SRAS' c. a recessionary; eventually shift to SRAS' d. a recessionary; eventually shift to SRAS"
How do prices change due to an economic contraction that is caused by a shift in aggregate demand? O a. They rise in the short run and fall back to their original level in the long run. b. They fall in the short run and fall even more in the long run. c. They rise in the short run and rise even more in the long run. d. They fall in the short run and rise back to their original level in the long run.
If the economy is operating way below capacity, an increase in aggregate demand causes a big change in the and small change in Select one: a. aggregate demand; aggregate supply b. price level; output C. output; price level d. aggregate supply; aggregate demand
Question 32 Assume the economy is in short-run macro-equilibrium at E1. If the economy is allowed to self-correct on its own then: Price Level LRAS SRAS El P1 AD Real GDP Y1 Yp Da the aggregate demand curve shifts right, leading to demand-pull inflation and growth in the economy b) the short-run aggregate supply curve shifts left, leading to cost-push inflation and a decrease in real GDP Og the short-run aggregate supply curve shifts right, leading to deflation and an increase in real GDP O d) the aggregate demand curve shifts left, leading to deflation and a decrease in real GDP
Figure 8.3 Price Level Long run Aggregate Supply A B AS₁ AS2 AD1 AD2 Quantity of Output Long run Aggregate Supply = Potential GDP Refer to Figure 8.3 above. If the economy is at point A, which of the following would cause a change from AD1 to AD2? An increase in expected future inflation. ○ An increase in expected future profit. ○ A tax cut or an increase in either transfer payments. O An increase in the interest rate or a decrease in the quantity of money.
QUESTION 48 Figure 3. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves. On the right-hand diagram, "Inf Rate" means "Inflation Rate." AS 2 B AS₁ KA A AD Y₂ Y₁ Y Refer to Figure 3. An increase in the price of oil could explain P₂ P₁ Inf Rate PC 1 PC2 a. neither the shift of the aggregate-supply curve from AS₁ to AS2 nor the shift of the Phillips curve from PC1 to PC2. b. both the shift of the aggregate-supply curve from AS₁ to AS2 and the shift of the Phillips curve from PC₁ to PC2. c. the shift of the aggregate-supply curve from AS1 to AS2, but it could not explain the shift of the Phillips curve from PC1 to PC₂. Od. the shift of the Phillips curve from PC₁ to PC2, but it could not explain the shift of the aggregate-supply curve from AS₁ to AS2.
What might shift the aggregate-supply curve tothe left? Use the model of aggregate demand andaggregate supply to trace the short-run and long-runeffects of such a shift on output and the price level.