Question

In: Economics

Draw a Classical Economic Model that is operating at the long-run equilibrium. In the short run,...

  1. Draw a Classical Economic Model that is operating at the long-run equilibrium. In the short run, what will most likely happen to RGDP if the AD curve shifts right?

    1. RGDP will increase

    2. RGDP will decrease

    3. RGDP will stay the same


  1. Draw a Classical Economic Model that is operating at the long-run equilibrium. In the long run what will most likely happen to RGDP if the AD curve shifts right?

    1. RGDP will continue to increase

    2. RGDP will continue to decrease

    3. RGDP will return to its original level


  1. According to the Classical economists, what will happen if wages suddenly decrease (ceteris paribus)?

    1. AD will increase

    2. AD will decrease

    3. LRAS will increase

    4. LRAS will decrease

    5. SRAS will increase

    6. SRAS will decrease


  1. Suppose that banks are holding extra money in their reserves. What can we infer about Say’s Law.

  1. Say’s Law will hold

  2. Say’s Law will not hold

Solutions

Expert Solution

Rahul Sunny answered 1 year ago
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