Tutorial Chapter 33 - Tutorial Chapter 33 Question 1 a) The...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Tutorial Chapter 33 Question 1 a) The current state of the economy is shown in figure. The aggregate-demand curve and short-run aggregate-supply curve intersect at a point to the left of long-run aggregate supply. b) A stock market crash leads to a leftward shift of aggregate demand. The equilibrium level of output and the price level will fall. Since the quantity of output is less than the natural rate of output, the unemployment rate will rise above the natural rate of unemployment. c) If nominal wages are unchanged as the price level falls, firms will be forced to cut back on employment and production. Over time as expectations adjust, the short-run aggregate supply curve will shift to the right moving the economy back to the natural rate of output. Question 2 a) The current state of the economy is shown in Figure 7. The aggregate-demand curve and short-run aggregate-supply curve intersect at the same point on the long-run aggregate-supply curve. b)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

Tutorial Chapter 33 - Tutorial Chapter 33 Question 1 a) The...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online