If productivity increases by 4% but wages increase by 2%, then it is most likely that:A. the SAS Curve will shift up. B. the SAS Curve will shift down. C. the SAS Curve will not shift. D. the AD Curve will shift to the left. The short run aggregate supply curve assumes that firms adjust__________________________________________, given a shift in aggregate demand:A. both prices and quantities in the short run B. prices but not quantities in the short run C. quantities but not prices in the short run D. neither prices nor quantities in the short run Suppose the economy is initially in an inflationary gap and then consumer and business expectations become even more optimistic. Assuming that the LAS Curve remains stationary and does not shift, in the long run it follows that:A. real output and the price level will be higher. B. only real output will be higher. C. only the price level will be higher. D. real output will be lower and the price level will be higher. Suppose AE = $12,000 + 0.8Y. Equilibrium income in the economy will be:A. $12,000 B. $15,000 C. $42,000 D. $60,000 All of the following statements about the AS/AD Model are true except:A. on the horizontal axis is the aggregate output level. B. on the vertical axis is the price of a certain good, like dishwashers for example. C. the model does not depend on the concept of opportunity cost and substitution. D. it can incorporate both Keynesian and Classical views on the economy. In the Multiplier Model, aggregate production creates:A. an equal amount of expenditures, but not necessarily an equal amount of income. B. an equal amount of savings, but not necessarily an equal amount of expenditures. C. an equal amount of expenditures, but not necessarily an equal amount of savings. D. an equal amount of income, but not necessarily an equal amount of expenditures. According to Say's Law:A. demand and supply in the economy can never be in disequilibrium. B. demand and supply in the economy can never be in equilibrium. C. people do not save. D. prices never rise in a market economy. Suppose that AE = $7,000 + 0.8Y. Using this information, what will equilibrium income be in the economy?A. $7,000 B. $8,750 C. $35,000 D. $52,000
This question was answered on: May 23, 2022
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