LRAS \" 250 SRAS 200 150 9 100 c 50 0 15 17 Real GDP (trillions of 2009 dollars)
ID: 1106523 • Letter: L
Question
LRAS " 250 SRAS 200 150 9 100 c 50 0 15 17 Real GDP (trillions of 2009 dollars) The above figure shows the long run aggregate supply curve (LAS) and the short run aggregate supply curve (SAS) for a hypothetical economy. Using the information in the figure, answer the following questions. a) Which movement illustrates the impact of a falling price level and a constant (sticky) wage rate? [E to I / Eto F / E to J / E to H b) There is no cyclical unemployment if real GDP equals $trilliorn. c) The economy would be in an expansion if real GDP was__[higher than 15 / lower than 15 / higher than 16 / lower than 17].Explanation / Answer
A. E to J. It shows prices have declined but not wages due to which employment is constant and hence supply.
B. 16 . It is the point where long run aggregate supply curve is situated where all the resoucres are fully employed.
C. Higher than 16. When actual output is more than full employment level output, expansion occurs.
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