SRAS LRAS SRAS AD, AD Real GDP per Yoar 6t) In the above figure,if we start at A
ID: 1129315 • Letter: S
Question
SRAS LRAS SRAS AD, AD Real GDP per Yoar 6t) In the above figure,if we start at ADI and SRASt, and the 61) supply increases unexpectedly, what would be the short-run cquilibrium even with rational expectations? C) E3 D) E2 , and the money D) E1 A) E1 B) P1 In the above figure, if we start at AD1 and SRAS 62) supply increases unexpectedly, what would be the long-run equilibrium? A) P1 B) E3 C) E2 63) Costs that tend to deter firms from changing their prices in response to 630 changes in the market equilibrium price are referred to as A) burden costs C) real menu costs. B) large menu costs D) small menu costs. 64) Population growth is more likely to contribute to economic growth 64) when A) technological progress is limited. B) economic freedom is present C) capital accumulation is limited D) the labor force participation rate does not increase. 65) Economic freedom by its nature suggests A) a lack of laws and regulations. B) economic anarchy C) minimal government interference D) zero government. 66) 66) Economic growth is measured by A) the annual percentage change in nominal GDP B) the annual percentage change in per capita nominal GDP. C) the annual percentage change in per capita real GDP D) the annual percentage change in the unemployment rate.Explanation / Answer
61. If we start at AD1 and SRAS1 , and the money supply increases unexpectedly, then short-run equilibrium would be E2. Because in the short run , when money supply increases then aggregate demand shifts to the right to AD2.
62. If we start at AD1 and SRAS1 and the money supply increases unexepectdly, then long run equilibrium would be E3. Because In the long run , supply curve also shifts.
63. Costs that tend to deter firms from changing their prices in response to changes in the market equilibrium price are referred to as small menu costs.
64. Population growth is more likely to contribute to economic growth when economic freedom is present.
65. Economic freedom by its nature suggests a lack of laws and regulations.
66. Economic growth is measured by the annual percentage change in per capita real GDP.
50. The quantity of money demanded varies inversely with interest rates.
51. When interest rates in the bond market go up the price of existing bonds goes down.
52. In the real world,contractionary monetary policy would be used to reduce the rate of inflation.
53. Effect of A contractionary monetary policy in the U.S have on the foreign trade sector is the higher value of the dollar will decrease exports and increase imports.
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