NEED A PERFECT PAPER? PLACE YOUR FIRST ORDER AND SAVE 15% USING COUPON:

SOLVED

11) The process of an economy adjusting from a recession back to potential GDP in the long run without any government intervention is known as A) monetary policy. B) an automatic mechanism. C) “releasing sticky prices.” D) fiscal policy. 12) Suppose the economy is at full employment and firms become more optimistic about the future profitability of new investment. Which of the following will happen in the short run? A) Output will decline. B) Prices will decline. C) Unemployment will decline. D) The aggregate demand curve will shift to the left. 13) Suppose the economy is at a short-run equilibrium GDP that lies below potential GDP. Which of the following will occur because of the automatic mechanism adjusting the economy back to potential GDP? A) Output will decrease. B) Prices will increase. C) Unemployment will rise. D) Short-run aggregate supply will shift to the right. 14) Why does the short-run aggregate supply curve shift to the right in the long run, following a decrease in aggregate demand? A) Workers and firms adjust their expectations of wages and prices downward and they accept lower wages and prices. B) Workers and firms adjust their expectations of wages and prices downward and they push for higher wages and prices. C) Workers and firms adjust their expectations of wages and prices upward and they push for higher wages and prices. D) Workers and firms adjust their expectations of wages and prices upward and they accept lower wages and prices. 15) The automatic mechanism ________ the price level in the case of ________ and ________ the price level in the case of ________. A) raises; recession; lowers; expansion B) raises; expansion raises; recession C) lowers; expansion; lowers; recession D) lowers; recession; raises; expansion 16) Refer to Figure 15-3. Which of the points in the above graph are possible long-run equilibria? A) A and B B) A and C C) A and D D) B and D 17) Refer to Figure 15-3. Which of the points in the above graph are possible short-run equilibria but not long-run equilibria? Assume that Y1 represents potential GDP. A) A and B B) A and C C) C and D D) B and D 18) Refer to Figure 15-3. Suppose the economy is at point A. If investment spending increases in the economy, where will the eventual long-run equilibrium be? A) A B) B C) C D) D 19) Refer to Figure 15-3. Suppose the economy is at point C. If government spending decreases in the economy, where will the eventual long-run equilibrium be? A) A B) B C) C D) D 20) Refer to Figure 15-3. Suppose the economy is at point A. If the economy experiences a supply shock, where will the eventual short-run equilibrium be? A) A B) B C) C D) D

Solution:

15% off for this assignment.

Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!

Why US?

100% Confidentiality

Information about customers is confidential and never disclosed to third parties.

Timely Delivery

No missed deadlines – 97% of assignments are completed in time.

Original Writing

We complete all papers from scratch. You can get a plagiarism report.

Money Back

If you are convinced that our writer has not followed your requirements, feel free to ask for a refund.