Which of the following statements are true which are

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Question 2Which of the following statements are true? Which are false? Explain why the false statements are untrue.a. Short-run aggregate supply curves reflect an inverse relationship between the price level and the level of real output. b. The long-run aggregate supply curve assumes that nominal wages are fixed. c. In the long run, an increase in the price level will result in an increase in nominal wages.
b.False, by definition, nominal wages in the long run are fully responsive to changes in the pricelevel.
Question 3Suppose the full-employment level of real output (Q) for a hypothetical economy is $250 and theprice level (P) initially is 100. Use the short-run aggregate supply schedules below to answer the questions that follow:a. What will be the level of real output in the short run if the price level unexpectedly rises from 100 to 125 because of an increase in aggregate demand? What if the price level unexpectedly falls from 100 to 75 because of a decrease in aggregate demand? Explain each situation, using figures from the table. b. What will be the level of real output in the long run when the price level rises from 100 to 125? When it falls from 100 to 75? Explain each situation.c. Show the circumstances described in parts aand bon graph paper, and derive the long-run aggregate supply curve.Answer

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