Question 1

List some of the elements that have increased the aggregate supply curve during the 1960s and 1970s that relate to labor.

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Question 2

-Using the above graph assume that the economy is in equilibrium at an output level of $600 billion and a price level of 110. What would happen to the aggregate output level and the price level if wages fell and their was an increase in government spending?

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-Using the above graph assume that the...

Question 3

Explain what a cost shock or supply shock is.

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Question 4

Coal is used as a source of energy in many manufacturing processes. Assume a long strike by coal miners reduced the supply of coal and increased the price of coal. What impact would this have on the economy? Use the AS/AD model to explain your answer.

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Question 5

-Using the above graph assume that the economy is in equilibrium at an output level of $600 billion and a price level of 110. What would happen to the aggregate output level and the price level with an expansionary monetary policy?

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-Using the above graph assume that the...

Question 6

Monetary and Fiscal Policy Effects
 
-Using the above graph, which output level is is considered potential output? Explain.

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-Using the...

Question 7

Why will the price level tend to rise as firms get closer to their productive capacity?

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Question 8

Explain why the aggregate supply curve is likely to be fairly flat at low levels of aggregate output.

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Question 9

Explain how economic decline can happen as it relates to the capital stock.

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Question 10

Graphically illustrate and explain the aggregate supply (AS) curve.

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Question 11

Illustrate what happens to the aggregate supply curve when there is an increase in costs (for example, and increase in wage rates or energy prices).

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Question 12

Monetary and Fiscal Policy Effects
 
-Using the above graph, how would you characterize an output level of $800 million?

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-Using the...

Question 13

At what point might the aggregate supply curve become completely vertical? Why might this be true?

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Question 14

Explain why it is not realistic to assume that all input prices (including wages) are fixed when deriving the short-run aggregate supply curve. What is a better assumption?

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Question 15

Illustrate the effects of an increase in economic growth on the aggregate supply curve.

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Question 16

Discuss why the aggregate supply function is relatively flat within the low ranges of aggregate output. Discuss why the aggregate supply function is relatively vertical within the ranges of high aggregate output.

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Question 17

Why is the short-run aggregate supply curve controversial?

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Question 18

-Using the above graph assume that the economy is in equilibrium at an output level of $600 billion and a price level of 110. What would happen to the aggregate output level and the price level in th face of an oil embargo?

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-Using the above graph assume that the...

Question 19

Discuss how public policy during the 1980s was aimed at shifting aggregate supply.

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Question 20

If the United States were to pass legislation that would make it easier for people to emigrate to the United States what impact would this have on the economy? Use the AS/AD model to explain your answer.

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Quiz 13: Policy Effects and Costs Shocks in the Asad Model

List some of the elements that have increased the aggregate supply curve during the 1960s and 1970s that relate to labor.

-Using the above graph assume that the economy is in equilibrium at an output level of $600 billion and a price level of 110. What would happen to the aggregate output level and the price level if wages fell and their was an increase in government spending?

Explain what a cost shock or supply shock is.

Coal is used as a source of energy in many manufacturing processes. Assume a long strike by coal miners reduced the supply of coal and increased the price of coal. What impact would this have on the economy? Use the AS/AD model to explain your answer.

-Using the above graph assume that the economy is in equilibrium at an output level of $600 billion and a price level of 110. What would happen to the aggregate output level and the price level with an expansionary monetary policy?

Monetary and Fiscal Policy Effects -Using the above graph, which output level is is considered potential output? Explain.

Why will the price level tend to rise as firms get closer to their productive capacity?

Explain why the aggregate supply curve is likely to be fairly flat at low levels of aggregate output.

Explain how economic decline can happen as it relates to the capital stock.

Graphically illustrate and explain the aggregate supply (AS) curve.

Illustrate what happens to the aggregate supply curve when there is an increase in costs (for example, and increase in wage rates or energy prices).

Monetary and Fiscal Policy Effects -Using the above graph, how would you characterize an output level of $800 million?

At what point might the aggregate supply curve become completely vertical? Why might this be true?

Explain why it is not realistic to assume that all input prices (including wages) are fixed when deriving the short-run aggregate supply curve. What is a better assumption?

Illustrate the effects of an increase in economic growth on the aggregate supply curve.

Discuss why the aggregate supply function is relatively flat within the low ranges of aggregate output. Discuss why the aggregate supply function is relatively vertical within the ranges of high aggregate output.

Why is the short-run aggregate supply curve controversial?

-Using the above graph assume that the economy is in equilibrium at an output level of $600 billion and a price level of 110. What would happen to the aggregate output level and the price level in th face of an oil embargo?

Discuss how public policy during the 1980s was aimed at shifting aggregate supply.

If the United States were to pass legislation that would make it easier for people to emigrate to the United States what impact would this have on the economy? Use the AS/AD model to explain your answer.