Suppose that aggregate supply deceases while aggregate demand held constant. a. What happens to the price level? b. What happens to national output?
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- Which of the following shifts aggregate supply to the right? a. a decline in the price of imported natural resources b. a technological advance c. an older labor force that leaves jobs less frequently d. All of the above are correct.What change does recession has on the price and output level when the change in aggregate demand is more than change in aggregate supply ?Discuss scenarios by giving practical examples. What might shift the aggregate-supply curve to the left? Use the model of aggregate demand and aggregate supply to trace through the short-run and long-run effects of such a shift on output and the price level.
- Using aggregate demand and aggregate supply, graph the effects on the price level and GDP of each of the following. Draw a large graph and label all axes, initial and final equilibrium points, direction of shift if any, all curves and lines, equilibrium values on the x- and y-axes. State the conclusion in words. a. A cut in income taxes b. An increase in military spending c. A drop in export demand by foreign purchasers d. An increase in imports e. A decline in business investment spendingHow does an increase in aggregate demand affect output, unemployment, and the price level in the short run?What happens when firms and workers underestimate future prices in the economy. On what would happen to actual output as opposed to the expected potential output.
- What change does recession has on the price and output level when the change in aggregate demand is less than change in aggregate supply ?What happens when firms and workers underestimate future prices in the economy? Explain the answer while focusing on what would happen to actual output as opposed to the expected potential output.A rightward shift in the aggregate supply curve with no change in the aggregate demand curve signals an economic expansion. True or False?
- 4. Draw an ADAS graph at equilibrium. Suppose there is widespread fear of a recession. Which curve will shift? Draw the new equilibrium. Video HelpIf the price level rises, what happens to aggregate supply? Aggregate supply _______. A. doesn't change, but the quantity of real GDP supplied increases B. decreases C. increases D. doesn't change, but the quantity of real GDP supplied decreasesWhat effects would increase in aggregate supply have on price levels and GDP?
