Changes in which of the following shifts the aggregate supply curve? i. the price level. ii....
Changes in which of the following shifts the aggregate supply curve?
i. the price level.
ii. the money wage rate.
iii. potential GDP.
A.
ii and iii
B.
iii only
C.
i, ii, and iii
D.
ii only
E.
i only
E.
a decrease in the real interest rate.
Homework Answers
Ans is B
in long run, aggregate supply curve is vertical at potential GDP. An increase in potential GDP will shift the aggregate supply curve to the right
However in short run, aggregate supply curve is affected by the wage rate. In short run case ans will be D
Add Answer to:
Changes in which of the following shifts the aggregate supply
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1. In addition to the price level,
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what does the aggregate demand and aggregate supply model focus
on?
a. real
GDP
b.
nominal GDP
c.
the real interest rate
d. stock
prices
2. Which statement best characterizes the long-run
aggregate-supply curve?
a. It is
horizontal.
b. It
shows a positive relationship between price level and output.
c.
It demonstrates the importance of money in the economy....
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