A change in the expected price level shifts the short-tun aggregate supply curve, but not the...

A change in the expected price level shifts the short-tun aggregate supply curve, but not the long-run aggregate-supply curve ?

Expert Solution

The above statement is true.

A change in the expected price level shifts the short run aggregate supply curve, but not the long run aggregate supply curve.
The short run aggregate supply curve is sensitive to the expected price level changes.
When the quantity supplied of various goods and services increases in the Economy, the price level also rises, which will cause the short run aggregate supply curve to slope upwards.
The short run aggregate supply curve shows that there is a positive correlation between price and the output.
That is when the short run aggregate supply curve slopes upwards due to price change, real GDP also increases at the given price.
The long run aggregate supply curve determines the change in the total Economic output due to change in the aggregate demand.
It is not related to the changes in the Expected price level. Hence it is static in nature and does not respond to the change in the expected prices.

Rahul Sunny answered 2 years ago

In the short run, an increase in government purchases, a. shifts the aggregate supply curve to...

In the short run, an increase in government purchases, a. shifts the aggregate supply curve to the right b. increases real GDP c. shifts the aggregate demand curve to the left d. decreases the price level

If the aggregate supply curve shifts to the right, the __curve shifts to the _....

If the aggregate supply curve shifts to the right, the ________ curve shifts to the _______.Multiple Choice:aggregate demandleft Phillipsleft aggregate demand rightPhillips; right

) Explain whether each of the following events shifts the short-run aggregate supply curve, the aggregate...

) Explain whether each of the following events shifts the short-run aggregate supply curve, the aggregate demand curve, both, or neither. For each event that does shift a curve draw a diagram to illustrate the effect on the economy (you don’t have to send me the graphs, but you should draw them on scratch paper for practice). Households decide to save a larger share of their income. Florida orange groves suffer a prolonged period of below-freezing temperatures. Increased job opportunities...

When the expected price level increases, it causes short-run aggregate supply to shift to the

Question 9 When the expected price level increases, it causes short-run aggregate supply to shift to the left, and an increase in the actual price level does not shift short-run aggregate supply. right, and an increase in the actual price level does not shift short-run aggregate supply. left, and an increase in the actual price level shifts short-run aggregate supply to the left. right, and an increase in the actual price level shifts short-run aggregate supply to the right. Question 10 Suppose the...

What shifts the short run aggregate supply curve? What is the shape of the long run...

What shifts the short run aggregate supply curve? What is the shape of the long run aggregate supply curve and why is it that way? What does potential output mean and what is happening when the economy is at potential output?

An increase in the expected price level shifts which curve and in which direction?

An increase in the expected price level shifts which curve and in which direction? aggregate demand curve shifts left. aggregate supply curve shifts right. aggregate supply curve shifts left. aggregate demand curve shifts right.

1. The aggregate supply curve shows the relationship between the aggregate price level and the aggregate:...

1. The aggregate supply curve shows the relationship between the aggregate price level and the aggregate: output supplied. money supply. unemployment rate. employment. 2. The short-run aggregate supply curve shows: the price level at which real output will be consumed. the price level at which real output will be in equilibrium. the positive relationship between the aggregate price level and aggregate output supplied. the negative relationship between the aggregate price level and aggregate output supplied. 3. A change in _____...

10. The long-run aggregate supply curve shifts right if

10. The long-run aggregate supply curve shifts right if a. Immigration from abroad increases b. The capital stock increases c. Technology advances d. All of the above are correct 11. Which of the following would cause prices to decrease and real GDP to increase in the short run? a. Short-run aggregate supply shifts right. b. Short-run aggregate supply shifts left. c. Aggregate demand shifts right. d. Aggregate demand shifts left. 12. Which of the following is not a reason the New York Federal Reserve Bank president always gets to vote at...

The aggregate supply curve is a. a schedule showing the relationship between the price level and...

The aggregate supply curve is a. a schedule showing the relationship between the price level and the quantity of real GDP supplied. b. usually negatively sloped. c. unaffected by the prices of inputs such as real wage rates. d. All of the above are correct.

1) In the long run, the short-run aggregate supply curve shifts to eliminate any existing output...

1) In the long run, the short-run aggregate supply curve shifts to eliminate any existing output gaps. Depict the parallel shift of the short-run aggregate supply curve that occurs in the long run. 2) Following a reduction in consumer spending, in the long run, what is the value of real GDP in this economy?

Question