Aggregate Supply
... Shifts in Aggregate Supply 1. Potential GDP increases from Y* to Y*1. The LRAS shifts to LRAS1 and the short-run aggregate supply curve shifts to SRAS1. 2. Decrease in resource prices will shift the SRAS to SRAS1. A decrease in the money wage rate does not change the LRAS. ...
... Shifts in Aggregate Supply 1. Potential GDP increases from Y* to Y*1. The LRAS shifts to LRAS1 and the short-run aggregate supply curve shifts to SRAS1. 2. Decrease in resource prices will shift the SRAS to SRAS1. A decrease in the money wage rate does not change the LRAS. ...
Macro – Unit 3 – Short Answer Essay Practice Questions
... the business cycle. However, investment spending is only one-fourth of consumption spending. Explain why investment spending can be so important if it is so much less than consumption spending. Decisions regarding investment spending are a marginal cost-marginal benefit analysis. The benefit is the ...
... the business cycle. However, investment spending is only one-fourth of consumption spending. Explain why investment spending can be so important if it is so much less than consumption spending. Decisions regarding investment spending are a marginal cost-marginal benefit analysis. The benefit is the ...
Graphs - Mr. Thomas
... to help you answer questions even when a graph is not required. For example, drawing a supply and demand graph can often help you answer multiple-choice questions that involve the supply and demand model. And a graph can often be used to help explain an answer to a free-response question, even if a ...
... to help you answer questions even when a graph is not required. For example, drawing a supply and demand graph can often help you answer multiple-choice questions that involve the supply and demand model. And a graph can often be used to help explain an answer to a free-response question, even if a ...
Gold, Black Gold, Steel, and World Inflation: A SAS Study
... growth rates. The US average annual inflation rate during the 1970-2000 period is 5.095 % which is smaller than the British rate of 5.395 %. The British economy was inflating little faster leading to a gradual deterioration of the British currency relative to the American currency. Gold is an obviou ...
... growth rates. The US average annual inflation rate during the 1970-2000 period is 5.095 % which is smaller than the British rate of 5.395 %. The British economy was inflating little faster leading to a gradual deterioration of the British currency relative to the American currency. Gold is an obviou ...
Spring 1997 Midterm #2
... Part II. Multiple choice questions (20 questions at 3 points each, for a total of 60 points) 1. Which of following would result in demand-pull inflation in the US? a) The US government increases taxes. b) The members of OPEC agree to lower the worldwide supply of oil. c) Demand for US exports incre ...
... Part II. Multiple choice questions (20 questions at 3 points each, for a total of 60 points) 1. Which of following would result in demand-pull inflation in the US? a) The US government increases taxes. b) The members of OPEC agree to lower the worldwide supply of oil. c) Demand for US exports incre ...
Keynesian and Classical
... same point. Suddenly, AD increases. Show what happens if we assume that wages do not have time to adjust. ...
... same point. Suddenly, AD increases. Show what happens if we assume that wages do not have time to adjust. ...
Document
... If efficiency wages prevail and workers are paid their real wage, already employed workers will reduce their effect, thereby reducing output. It ignores the fact that leisure increases during a recession. It ignores the loss of government revenue and additional government expenditures that occur whe ...
... If efficiency wages prevail and workers are paid their real wage, already employed workers will reduce their effect, thereby reducing output. It ignores the fact that leisure increases during a recession. It ignores the loss of government revenue and additional government expenditures that occur whe ...
Aggregate Demand Aggregate Supply
... Equilibrium: Real Output and the Price Level A. Equilibrium price and quantity are found where the aggregate demand and supply curves intersect. (See Key Graph 10.6 for illustration of why quantity will seek equilibrium where curves intersect.) (Key Questions 4 and 7) B. Increases in aggregate deman ...
... Equilibrium: Real Output and the Price Level A. Equilibrium price and quantity are found where the aggregate demand and supply curves intersect. (See Key Graph 10.6 for illustration of why quantity will seek equilibrium where curves intersect.) (Key Questions 4 and 7) B. Increases in aggregate deman ...
Business Cycle Theories
... following a change in aggregate demand, if nominal wages change in proportion, then the aggregate supply curve shifts vertically by the same amount as the demand shift, with no change in real variables. Self-correcting forces: the role of flexible prices in stabilising real GDP under some conditions ...
... following a change in aggregate demand, if nominal wages change in proportion, then the aggregate supply curve shifts vertically by the same amount as the demand shift, with no change in real variables. Self-correcting forces: the role of flexible prices in stabilising real GDP under some conditions ...
Unit 4 Homework Packet Due Friday 4/10 Read pages 306
... 34. What happens to the demand of the government if Congress increases spending? 35. According to Keynes what would be the proper fiscal policy during periods of ...
... 34. What happens to the demand of the government if Congress increases spending? 35. According to Keynes what would be the proper fiscal policy during periods of ...
inflation and unemployment slide show a2 2009 - burgate
... The Retail Price Index (RPI) - This shows changes in the price of the average persons shopping basket. Calculated using a weighted average of each months price change. ...
... The Retail Price Index (RPI) - This shows changes in the price of the average persons shopping basket. Calculated using a weighted average of each months price change. ...
inflasi - E-conosmart.com
... • Inflation can only happen if there is a volume increase in the money supply (both additions currency and demand deposits). • Without an increase in the money supply then there will be inflation, despite the rise in prices. • For example, in case of crop failures, prices tend to rise, but the incre ...
... • Inflation can only happen if there is a volume increase in the money supply (both additions currency and demand deposits). • Without an increase in the money supply then there will be inflation, despite the rise in prices. • For example, in case of crop failures, prices tend to rise, but the incre ...
IS –LM model
... • The expansionary policy that shifts aggregate demand to AD2 has a bigger effect on output when it is unanticipated than when it is anticipated. • When the expansionary policy is unanticipated, the short-run aggregate supply curve does not shift, and the economy moves to point U, so that aggregate ...
... • The expansionary policy that shifts aggregate demand to AD2 has a bigger effect on output when it is unanticipated than when it is anticipated. • When the expansionary policy is unanticipated, the short-run aggregate supply curve does not shift, and the economy moves to point U, so that aggregate ...
(a) Which case gives rise to more inflation, a steep aggregate supply
... The decrease in rate of interest increases the total investment and ultimately increases the aggregate expenditure. The AE curve shift upwards and the real GDP is increased. If there is a $ 50 billion increase in the money supply and total reduction of 2.5 percent. The reduction in interest rate wil ...
... The decrease in rate of interest increases the total investment and ultimately increases the aggregate expenditure. The AE curve shift upwards and the real GDP is increased. If there is a $ 50 billion increase in the money supply and total reduction of 2.5 percent. The reduction in interest rate wil ...
Study Guide Exam 2 Understand GDP and its accounting The
... Understand price index and measures of inflation Inflation is measured using _________ in a price index. If a market basket was defined in 2014 and it cost $10,000 to purchase the items in that basket in 2014, while it cost $11,000 to purchase those identical goods in 2015, then the price index for ...
... Understand price index and measures of inflation Inflation is measured using _________ in a price index. If a market basket was defined in 2014 and it cost $10,000 to purchase the items in that basket in 2014, while it cost $11,000 to purchase those identical goods in 2015, then the price index for ...
Student 3
... right; this increases prices and therefore creates some demand-pull inflation. However, the other two policies show no increase or a decrease in inflation, because the policies result in a double shift or a shift of the AS curve to the right, so the only real thing that has happened is real output h ...
... right; this increases prices and therefore creates some demand-pull inflation. However, the other two policies show no increase or a decrease in inflation, because the policies result in a double shift or a shift of the AS curve to the right, so the only real thing that has happened is real output h ...
A rise in the price of oil imports has resulted in a decrease of short
... 26. When people grow very confident they are not going to lose their job, their demand for money: a. increases. b. decreases. c. stays the same. 27. Lags are a problem for: a. monetary policy. b. fiscal policy. c. both of the above. d. none of the above. 28. If the government did not collect taxes b ...
... 26. When people grow very confident they are not going to lose their job, their demand for money: a. increases. b. decreases. c. stays the same. 27. Lags are a problem for: a. monetary policy. b. fiscal policy. c. both of the above. d. none of the above. 28. If the government did not collect taxes b ...
Supply Side Approaches
... Classical economists were not renowned for being a happy, optimistic bunch of economists (in terms of their economic thinking!). Some believed that population growth would be too rapid for the resources available (Malthus was a particular exponent of this view). If this wasn't enough to depress the ...
... Classical economists were not renowned for being a happy, optimistic bunch of economists (in terms of their economic thinking!). Some believed that population growth would be too rapid for the resources available (Malthus was a particular exponent of this view). If this wasn't enough to depress the ...