Indicate whether the descriptions that follow are short-run aggregate supply curves, long-run aggregate supply curves, or immediate-short-run aggregate supply curves. a. A vertical line. b. The price level is fixed. c. Output is fixed.
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- What would be the effect of an unexpected increase in the price of oil on a graph showing aggregate demand and short-run aggregate supply that is initially in equilibrium? The effect of an unexpected increase in the price of oil will be for the A. aggregate demand curve to shift down. B. aggregate demand curve to shift up. C. short-run aggregate supply curve to shift up. D. short-run aggregate supply curve to shift down. The new equilibrium will be where A. the new short-run aggregate supply curve interects the original aggregate demand curve. B. the original short-run aggregate supply curve interects the original aggregate demand curve. C. the new short-run aggregate supply curve interects the original short-run aggregate supply curve. D. the new short-run aggregate supply curve interects a new aggregate demand curve.Suppose that the U.S. economy is at full employment when strong economic growth in Asia increases the demand for U.S.-produced goods and services. How the U.S. price level and real GDP will change in the short run?A change in which of the following would shift the short-run aggregate-supply curve but not the long-run aggregate-supply curve? a)the labor force b)the expected price level c)the capital stock d)the state of technology
- 4. Draw an ADAS graph at equilibrium. Suppose there is widespread fear of a recession. Which curve will shift? Draw the new equilibrium. Video HelpWhich of the following are assumed to remain unchanged along a given short-run aggregate supply curve? Check all that apply. A. The position of the aggregate demand curve B. The price level C. Real GDP D. Input pricesExplain why the long-run aggregate-supply curve is vertical. Explain three theories for why the short-run aggregate-supply curve slopes upward. What variables shift both the long-run and short-run aggregate-supply curve? What variable shifts the short-run aggregate-supply curve but not the long-run aggregate-supply curve ?
- Suppose firms become very optimistic about future business conditions and invest heavily in new capital equipment. a. Draw an aggregate-demand/aggregate-supply diagram to show the short-run effect of this optimism on the economy. Label the new levels of prices and real output. Explain in words why the aggregate quantity of output supplied changes. b. Now use the diagram from part (a) to show the new long-run equilibrium of the economy. (For now, assume there is no change in the long run aggregate-supply curve.) Explain in words why the aggregate quantity of output demanded changes between the short run and the long run. c. How might the investment boom affect the long run aggregate-supply curve? ExplainAssume the aggregate demand and aggregate supply curve intersect at a price level of 100. Explain the effect of a shift in the price level to 120 and to 50Suppose firms become very optimistic about future business conditions and invest heavily in new capital equipment. a. Draw an aggregate-demand/aggregate-supply diagram to show the short-run effect of this optimism on the economy. Label the new levels of prices and real output. Explain in words why the aggregate quantity of output supplied changes. b. Now use the diagram from part (a) to show the new long-run equilibrium of the economy. (For now, assume there is no change in the long run aggregate-supply curve.) Explain in words why the aggregate quantity of output demanded changes between the short run and the long run. c. How might the investment boom affect the long run aggregate-supply curve? Explain Plaese mam/sir give me answer in deatail as soon as possible please
- Suppose firms become very optimistic about future business conditions and invest heavily in new capital equipment. Show the short-run effect of this optimism on the aggregate-demand curve. Price Level LRAS Quantity of Output AS₂2 AS, The price level has risen. Wages are not sticky. AD₂ AD₁ Prices are sticky. People have misperceptions about the price level. Aggregate Demand Aggregate Supply LRAS Which of the following reasons could explain why the aggregate quantity of output supplied changes? Check all that apply. ?19. Problems and Applications Q10 Suppose an increase in the money supply leads to a fall in interest rates, thereby encouraging firms to invest more. Show the short-run effect of this change in investment spending on the aggregate-demand curve. (?) Price Level LRAS Aggregate Supply Aggregate Demand Quantity of Output Aggregate Demand Aggregate Supply LRASThe long-run aggregate supply curve shows that by itself a permanent change in aggregate demand would lead to a long-run change Answer in the price level and output. in the price level, but not output. in output, but not the price level. in neither the price level nor output.