Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Economics Expert

Illustrate shifting the Aggregate demand and aggregate supply curve.

'An increase in aggregate supply causes a shift from SRAS1. To SRAS2 because this shift in the aggregate supply curve results in the lower price level, consumption investment, and net exports will increase. This change cause the aggregate demand curve to shift to the right from AD41 to AD2. We know that real GDP will increase, but we can't be sure whether the price level will rise or fall because that depends on wether the aggregate supply shifts out farther than aggregate demand, so I show the final price level, P3. As being lower than the initial price level, P3.'

1210_aggregate supply.jpg

Which of the following is a correct statement about the student's analysis?

1.The student is Incorrect, because the aggregate demand curve does not shift because the price level changes.

2.The student's analysis is correct.

3.The student is correct.

4.The student is incorrect, because the price level should rise when SRAS increases.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M919884
  • Price:- $15

Guranteed 24 Hours Delivery, In Price:- $15

Have any Question? 


Related Questions in Business Economics

Ldquothe expected future value of an interest rate in a

“The expected future value of an interest rate in a risk-neutral world is greater than it is in the real world.” In your own words, what does this statement imply about the market price of risk for (a) an interest rate a ...

Defining managerial economics by reffering two economists

Defining managerial economics by reffering two economists, using the positive approach. discuss by using specific examples the purpose of economic analysis and use of economic model.

Present and future values of a cash flow stream an

PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An investment will pay $150 at the end of each of the next 3 years, $250 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investment ...

Consider a consumer whose preferences over the goods are

Consider a consumer whose preferences over the goods are represented by the utility function U(x; y) = xy2. Recall that for this function the marginal utilities are given by MUx(x; y) = y2 and MUy(x; y) = 2xy. (a) What a ...

Marketing managers at home office systems which markets

Marketing managers at Home Office Systems, which markets word-processing software to the household consumer, are in the process of preparing annual forecasts and budgeting. Based on their analysis, the following are fore ...

How would the value of a firm be affected by the following

How would the value of a firm be affected by the following events? a. The introduction of a new product designed to increase the firm's cas inflows is delayed by one year. The size of expected cash flows is not affected. ...

Discuss the types of situations where you would expect to

Discuss the types of situations where you would expect to see non-constant variance in the data. Provide examples to support your response. Describe a specific instance where heteroscedasticity would be a problem and the ...

Using data sources from business publications and the

Using data sources from business publications and the Internet, discuss significant trends in both demand and supply in the copper industry that have influenced the price of copper since September 2011. is Chinas economi ...

If the economy were at a steady-state unemployment rate

If the economy were at a steady-state unemployment rate with a separation rate of 0.04 per month and a job-finding rate of 0.15 per month, and the labor force was 200 million, -How many individuals would lose their jobs ...

Use a supply and demand diagram to show how that response

Use a supply and demand diagram to show how that response will change the combined amount of consumer surplus and producer surplus in the market for cashews. Instructions: Given the initial equilibrium price P 1 and quan ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate