Options for A: $14 trillion/$16 trillion/$12 trillion/$10 trillion/$11 trillion
ID: 1116305 • Letter: O
Question
Options for A: $14 trillion/$16 trillion/$12 trillion/$10 trillion/$11 trillion
Options for B: expansionary gap / contractionary gap
Options for C: $5 trillion/ $1 trillion/ $2 trillion/ $3 trillion/ $4 trillion
Options for D: 135/140/145
Options for E: lower than/ higher than/ the same as
Options for F: decrease/ increase
Options for G: decrease/increase
Options for H: LRAS/ SRAS/ AD
Options for I: right/ left
Options for J: decrease/ increase
Options for K: decrease/ increase
Options for L: decrease/ increase
Options for M: LRAS/ AD/ SRAS
Options for N: left/ right
Options for O: unemployment/ inflation
Options for P: inflation / unemployment
ALSO need help with the graph!
3. The effect of Federal Reserve action (or inaction) in the AD-AS model The following graph shows an economy that is currently producing at point A (grey star symbol), which corresponds to the intersection of the AD and SRAS, curves. LRAS SRAS1 165 160 No Intervention SRAS 155 150 If Fed Intervenes 145 140 AD 135 AD 130 125 10 11 12 13 14 151617 18 REAL GDP (Trillions of dollars) According to the graph, the potential output of this economy is Since real GDP is currently $12 trillion (as shown by point A), this level of potential output means there is currently Along SRAS, wages would haveotiated based on an expected price level of means that real wages are labor market conditions would cause nominal wages to would reach a new long-run equilibrium . Since the actual price level at point A is 140, this unemployment. If the Fed does not intervene, these curve to the- . Eventually, the economy had been negotiated, which will , shifting the On the previous graph, use the tan point (dash symbol) to indicate the long-run equilibrium output and price level if the Fed does not intervene (Assume there are no feedback effects on the curve that does not shift.)Explanation / Answer
Long run equilibrium output and price: $14 , $145
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