Question

In: Economics

For the following questions identy Which curve would be affected? is there a Movement Or Shift...

For the following questions identy Which curve would be affected? is there a Movement Or Shift and is it left or right? PLEASE EXPLAIN WHY THE ANSWERS ARE CORRECT, I have the correct answers listed just need to know why

1. Hourly wages & salaries rose by 1.9% and the non-wage component by 1.4% in the year up to the second quarter of 2012, ? In 2012, the economy’s _________.? Answer: SRAS decreases

2. …a weak reading of German investor sentiment - on concerns about a slowing in U.S. economic momentum and uncertainty around the emerging markets outlook….” ? ______ in Germany _____.? Answer: AD, decreases

3. Thanks to a surge in demand from China, there is an increase in car manufacturing in last quarter in U.S.”? _________ in U.S. _____.

Answer: AD, increases.

4. In U.K., an underlying measure of inflation, which strips out increases in energy, food, alcohol and tobacco, rose by 1.6 percent and factory gate prices rose by 0.9 percent”?

________ in U.K _____.?

Answer: ?AD or SRAS in U.K does not change (movement).?

5. In U.S., Sales of new cars surged 11.4% on quarter, leading to a 17.0% jump in consumption of durable goods due to boost in consumer sentiment.” ?

_________ in U.S. _____.

Answer: AD in U.S. increases.

PLEASER EXPLAIN WHY THE ANSWERS ARE CORRECT, I DO NOT UNDERSTAND THE CONCEPT

Solutions

Expert Solution

1. SRAS decreases. This is because when wage rate is increased, firms either hire less workers or replace them with capital. Since capital is usually not available in flexible units, this implies a lower production level when cost of production increases. Hence SRAS decreases.

2. AD, decreases. This is perhaps because AD is composed of C + I + G + NX and since there are business pessimism in Germany, German investors are reluctant to invest. So I falls and so AD decreases.

3. AD, increases. If China demans more US made goods, US will produce more goods for exports so exports will rise and since exports are a part of AD, AD increases.  

4. The question is suggesting a price increase in UK. Now AD is inveresly related and AS is positively related to price. This shows that if price rises, AD moves down and SRAS moves up.

5. Again consumption is a part of AD as C + I + G = AD. Now in case consumption is increased, AD is increased.


Related Solutions

Which of the following elasticities measure a movement along a curve rather than a shift in...
Which of the following elasticities measure a movement along a curve rather than a shift in the curve? (a) The price elasticity of demand, (b) the income elasticity of demand (c) the cross elasticity of demand, or (d) all of them
Which of the following would result in a movement along the demand curve? a. an increase...
Which of the following would result in a movement along the demand curve? a. an increase in the prices of inputs in production b. a change in preferences c. an increase in the price of a substitute in consumption d. a decrease in income
Which of the following situations would cause a shift in the demand curve, as opposed to...
Which of the following situations would cause a shift in the demand curve, as opposed to a change in the quantity demanded? Vegetable prices rise as the majority of the population no longer eats meat. Auto sales increase due to increased employment. Gasoline consumption decreases as the taxes included in the price of gasoline increase. Both A and B.
Which of the following would shift the demand curve for cars to the right? Group of...
Which of the following would shift the demand curve for cars to the right? Group of answer choices An increase in the federal funds rate An increase in discount lending by the Fed to banks An increase in home mortgage interest rates An increase in the unemployment rate over the NAIRU originally proposed the use of government spending to stimulate the economy in the 1930s, during the Great Depression. Group of answer choices John Maynard Keynes Franklin Delano Roosevelt Albert...
graphically analyze whether there is a movement or a shift in the appropriate curve and then...
graphically analyze whether there is a movement or a shift in the appropriate curve and then determine the effect on the equilibrium price and quantity. in the gasoline market: IF there is a rumor among producers of another oil embargo which will cause a prices to go up. An oil embargo actually takes place.
1. which of the following would cause a definite leftward shift of the demand curve? a)...
1. which of the following would cause a definite leftward shift of the demand curve? a) an expectation by consumers of a lower price and an increase in the price of a compliments b) an expectation by consumers of lower income and an increase in the price of a substitute c) a decrease in the number of consumers and a decrease in income (assume inferior good) d) a decrease in income and a positive change in consumer tastes 2. When...
Which of the following would cause a definite leftward shift of the supply curve? an increase...
Which of the following would cause a definite leftward shift of the supply curve? an increase in the cost of an input and an expectation by firms of a lower price an increase in the price of a complement in production and a decrease in the cost of an input an increase in taxes and an increase in the number of firms an increase in the price of a substitute in production and a decrease in productivity
1.A change in which of the following would cause the LM curve to shift? To rotate?...
1.A change in which of the following would cause the LM curve to shift? To rotate? To both shift and rotate? Which do not affect the position or slope of the LM curve? (a)nominal money supply (b)responsiveness of the demand for money to the interest rate (c)responsiveness of the demand for money to income (d)business and consumer confidence (e)interest rate (r) (f)price level (P)
Determine whether there will be a movement along with the demand /supply curve or a shift...
Determine whether there will be a movement along with the demand /supply curve or a shift in the demand /supply curve. if there is a shift in the curve ,indicate the direction of the shift :- 1. an increase in the price of complement in production. 2.a decrease in the taste of consumers for a product. 3.a decrease in the number of buyers in the market. 4. a lowering of the product price. 5.a worsening of business expectations. 6. a...
Which of the following will shift the SRAS curve to the right?
Which of the following will shift the SRAS curve to the right?  A. an increase in the price of oil B. an increase in the minimum wage C. an increase in the actual price level D. an increase in immigration from other countries
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT