Roderick_April_BU_204_05_Unit_6_Homework

Roderick_April_BU_204_05_Unit_6_Homework - supplied at any...

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1 . I would say that the upward sloping short run aggregate supply curve is horizontal, because this shows the relationship between the aggregate price level and the quantity of aggregate output supplied, and the long-run aggregate supply curve is vertical because it shows the relationship between the aggregate price level and the quantity of aggregate output supplied. #4 I think both is correct, because using the LRAS curve represents a movement down the aggregate demand curve, and using the SRAS represents a rightward shift of the aggregate demand curve. #10 My ranked order would be #1 Positive supply shock , because this reduces production cost and increase quantity
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Unformatted text preview: supplied at any given price, leading to a rightward shift in SRAS. #2 Positive demand shock , because this has short run effects on aggregate output, because the economy is self correcting. #3 Negative demand shock , because if policy makers a quickly they can use monetary or fiscal policy to shift the aggregate demand curve back to the right. #4 Negative supply shock , because there is a fall in aggregate output and a rise in aggregate price level that has at the same time, and it is not an easy thing to fix. #13 a. The output will decrease b. The output will increase, because spending will have increased....
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