chapter 15 hw

chapter 15 hw - more when they are higher than expected. 7....

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Colleen Clancy Chapter 15 Homework 1. a. The aggregate demand curve will be a downward slope. In the short run, the aggregate supply curve is upward sloping. In a long run the aggregate supply curve is vertical at the natural rate of output. b. If a stock market crash occurred, the aggregate demand would fall so therefore the quantity of output goes down and then the price level would increase. c. Assuming no changes in economic conditions or in the policy, the stickiness of wages gives incentives to produce less than the natural rate of output when price levels turn out to be lower than expected and to produce
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Unformatted text preview: more when they are higher than expected. 7. The short run output and price level will both increase. If the Fed increased the money supply without the public knowing then the price level would remain the same and the output would increase. 11. a. Output and pricelevel would decrease. b. output would decrease, price level would remain the same. c. Output will increase and Price level will go down. d. Output will remain the same and price level will go up....
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This note was uploaded on 04/08/2008 for the course ECON 1002 taught by Professor Rissell during the Spring '08 term at Villanova.

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