Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 32, Problem 7RQ
To determine
True or false.
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Students have asked these similar questions
Consider the basic AD/AS macro model. A rise in an input price like the price of oil would be expected to cause
a new macroeconomic equilibrium in which the price level
Select one:
O a. is lower and real GDP higher than in the initial equilibrium.
O b. and real GDP are higher than in the initial equilibrium.
O c. is higher and real GDP remained the same as in the initial equilibrium.
O d. is higher and real GDP lower than in the initial equilibrium.
O e. and real GDP are lower than in the initial equilibrium.
Price
level
170
140 F
120
100
0
L
AS
AD3
AD, AD₂
3.0 4.0 5.0 6.0 7.0 8.0
Real GDP
In Exhibit 10-8, if aggregate demand shifts from AD₁ to AD2.
a. real GDP will increase from $3.0 to $7.0, and the price level will remain the same.
AD5
ADA
Ob. real GDP and the price level will both remain the same.
Oc. real GDP will increase from $3.0 to $4.0, and the price level will increase from 100 to 140.
O d. real GDP will increase from $3.0 to $4.0, and the price level will remain the same.
4. LO 4 In Figure 3.11, after the 1981-1982 reces-
sion, does the price level appear to be procyclical,
countercylical, or acyclical? Why is this important?
Chapter 32 Solutions
Economics (Irwin Economics)
Ch. 32.7 - Prob. 1QQCh. 32.7 - Prob. 2QQCh. 32.7 - Prob. 3QQCh. 32.7 - Prob. 4QQCh. 32.A - Prob. 1ADQCh. 32.A - Prob. 2ADQCh. 32.A - Prob. 1ARQCh. 32.A - Prob. 2ARQCh. 32.A - Prob. 1APCh. 32.A - Prob. 2AP
Ch. 32 - Prob. 1DQCh. 32 - Prob. 2DQCh. 32 - Prob. 3DQCh. 32 - Prob. 4DQCh. 32 - Prob. 5DQCh. 32 - Prob. 6DQCh. 32 - Prob. 7DQCh. 32 - Prob. 8DQCh. 32 - Prob. 9DQCh. 32 - Prob. 1RQCh. 32 - Prob. 2RQCh. 32 - Prob. 3RQCh. 32 - Prob. 4RQCh. 32 - Prob. 5RQCh. 32 - Prob. 6RQCh. 32 - Prob. 7RQCh. 32 - Prob. 8RQCh. 32 - Prob. 9RQCh. 32 - Prob. 1PCh. 32 - Prob. 2PCh. 32 - Prob. 3PCh. 32 - Prob. 4PCh. 32 - Prob. 5P
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- You are hired by the Council of Economic Advisors (CEA) as an economic consultant.The chairperson of the CEA tells you that she believes the current unemployment rate istoo high. The unemployment rate can be reduced if aggregate output increases. She wantsto know what policy to pursue to increase aggregate output by 300 billion TL. The bestestimate she has for the MPC is 0.8. Which of the following policies should yourecommend?a) Increase government purchases by 75 billion TL.b) Reduce taxes by 75 billion TL.c) Reduce taxes by 75 billion TL and to increase government purchases by 75 billion TL.d) Reduce the budget deficit by 300 billion TLarrow_forwardPrice level LRAS AS1 Figure 12.8 C B A ASO AS₂ AD₁ ADO E Y2 Yo Y₁ Aggregate output ($ billion) AD₂ Refer to Figure 12.8. This economy cannot continue to produce Y₁ (or at point B) because O the price of raw material will increase, shifting the aggregate demand curve to AD2. O all of the above O the price of raw material and wages will increase shifting the aggregate supply curve to AS₁. O the price of inputs will decrease, shifting the aggregate supply curve to AS2.arrow_forwardRefer to the diagram that shows an AD/AS model for a hypothetical economy. The economy begins in long-run equilibrium at point A. AS2 Following the negative AS shock shown in the diagram, the adjustment process will take the economy to a long-run equilibrium where the price level is and real GDP is AS, O A. 110: 1,120 O B. 50: 1.020 O C. 50; 950 O D. 110; 750 O E. 70; 1,020 70- 50- *...... AD 750 1020 1120 950 Real GDP Price Levelarrow_forward
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