Answer the following questions on the basis of the three sets of data for the co
ID: 1112345 • Letter: A
Question
Answer the following questions on the basis of the three sets of data for the country of North Vaudeville:
(A)
(B)
(C)
Price Level
Real GDP
Price Level
Real GDP
Price
Level
Real
GDP
110
280
100
205
110
230
100
255
100
230
100
230
95
230
100
255
95
230
90
205
100
280
90
230
a) Which set of data illustrates aggregate supply in the immediate short run in North Vaudeville?
The data in _________.
Which set of data illustrates aggregate supply in the short run in North Vaudeville?
The data in ___________.
Which set of data illustrates aggregate supply in the long run in North Vaudeville?
The data in ____________.
b) Assuming no change in hours of work, if real output per hour of work increases by 20 percent, what will be the new levels of real GDP in the right column of A?
Instructions: Enter values as whole numbers.
Price level 110: New output = ___________
Price level 100: New output = ___________
Price level 95: New output = _____________
Price level 90: New output = _____________
c) Do the new values reflect an increase in aggregate supply or do they indicate a decrease in aggregate supply?
(A)
(B)
(C)
Price Level
Real GDP
Price Level
Real GDP
Price
Level
Real
GDP
110
280
100
205
110
230
100
255
100
230
100
230
95
230
100
255
95
230
90
205
100
280
90
230
Explanation / Answer
a) Which set of data illustrates aggregate supply in the immediate short run in North Vaudeville?
The data in A because both price and GDP are increasing
Which set of data illustrates aggregate supply in the short run in North Vaudeville?
The data in B where Real GDP is increasing but prices are sticky and so they fixed
Which set of data illustrates aggregate supply in the long run in North Vaudeville?
The data in C because Real GDP is fixed and is not related to price level.
b) Increase respective real GDP by 20%
Price level 110: New output = 280 + 56 = 336
Price level 100: New output = 255 + 51 = 306
Price level 95: New output = 230 + 46 = 276
Price level 90: New output = 205 + 41 = 246
c) The values reflect an increase in aggregate supply because it shifts up at every price level
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.