Chapter 11: Q. 5 (page 251)
What determines how much real responds to changes in the price level along the short-run aggregate supply curve?
Short Answer
As the result,a modification in the optimal price level may force the to react quickly.
Chapter 11: Q. 5 (page 251)
What determines how much real responds to changes in the price level along the short-run aggregate supply curve?
As the result,a modification in the optimal price level may force the to react quickly.
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Get started for freeHow has the fact that thousands of people from Puerto Rico have moved to the United States to search for jobs likely influenced Puerto Rico's official unemployment rate? Explain your reasoning.
Between carly 2008 and the beginning of 2009 , a gradual stock-market downturn and plummeting home prices generated a substantial reduction in U.S. household wealth that induced most U.S. residents to reduce their planned real spending at any given price level. Explain, from a short-run Keynesian perspective, the predicted effects of this event on the equilibrium U.S. price level and equilibrium U.S. real GDP. Be sure to discuss the spending gap that the Keynesian model indicates would result in the short run.
Explain what factors cause shifts in the shortrun and long-run aggregate supply curves
Consider a country with an economic structure consistent with the assumptions of the classical model. Suppose that businesses in this nation suddenly anticipate higher future profitability from investments they undertake today. Explain whether or how this could affect the following:
The current equilibrium interest rate
Current equilibrium real
Current equilibrium employment
Current equilibrium saving
Future equilibrium real
Suppose that the Keynesian short-run aggregate supply curve is applicable for a nation's economy. Use appropriate diagrams to assist in answering the following questions:
What are two events that can cause the nation's real to increase in the short run?
What are two events that can cause the nation's real to increase in the long run?
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