Chapter 10: Q. 2 LO (page 212)
Explain why the aggregate demand curve slopes downward and list key factors that cause this curve to shift
Whenever key aspects such as discretionary income, domestic investment, state spending, commodities, and importation expand, the aggregate supply leans downhill.
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Identify the combined shifts in long-run aggregate supply and aggregate demand that could explain the following simultaneous occurrences,
a. An increase in equilibrium real GDP and an increase in the equilibrium price level
b. A decrease in equilibrium real GDP with no change in the equilibrium price level
c. An increase in equilibrium real GDP with no change in the equilibrium price level
d. A decrease in equilibrium real GDP and a decrease in the equilibrium price level
Suppose that the long-run aggregate supply curve is positioned at a real GDP level of trillion in base-year dollars, and the long-run equilibrium price level (in index number form) is 115 . What is the full-employment level of nominal GDP?
Evaluate likely reasons for persistent inflation in recent decades
As more of the nation's systems of river locks become deficient, what is happening to the pace at which the U.S. production possibilities curve shifts outward over time?
What would happen to the South African inflation fate in future years if the curve were to begin shifting rightward at a more rapid pace than the LRAS curve?
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