Exhibit o041 evel n Eegas Aggregate demand Real GOP 1 Y2 17. The graph in Exhibi

Question

Exhibit o041 evel n Eegas Aggregate demand Real GOP 1 Y2 17. The graph in Exhibit 0041 shows a(n) a. increase in short-run aggregate supply b. increase in long-run aggregate supply c. decrease in short-run aggregate supply d. decrease in long-run aggregate supply 18. If every time disposable income increases by S5 billion, consumption increases by S and saving increases by $1 billion, the MPC and MPS are, respectively. c. 1, 0 d. 4/5, 1/s The long-run aggregate supply curve is represented by a. b. c. d. 19. an upward-sloping line a downward-sloping line a vertical line a horizontal line a. real GDP declines, but nominal GDP can increase, decrease, or remain the same b. nominal and real GDP increase 0. As an expansionary gap is closed in the long run, nominal GDP increases but real GDP declines nominal and real GDP decline c. d. In the long run, the aggregate demand curve determines the price level. a. True b. False

Explanation / Answer

Q17) b) increase in long run AS.

Q18) d) 4/5,1/5

Q19) c) a vertical line

Q20) a)

Q21) a)true

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