Question: Using the aggregate demand - aggregate supply model, predict what happens in the short run when there is a general decrease in raw materials cost.

Using the aggregate demand-aggregate supply model, predict what happens in the short run when there is a general decrease in raw materials cost.
The aggregate demand curve shifts left; the aggregate supply curve is not affected; price level and real GDP decrease.
The aggregate demand curve shifts right; the aggregate supply curve is not affected; price level and real GDP increase.
The aggregate supply curve shifts right; the aggregate demand curve is not affected; price level decreases; real GDP increases.
The aggregate supply curve shifts left; the aggregate demand curve is not affected; price level increases; real GDP decreases.
Using the aggregate demand - aggregate supply

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Q:

Final_Exam_Macro Question 1 (2 points) Purchasing-power panty theory does not hold at all times because many goods are not easily transported and the same goods produced in different countries may be...

Q:

(1) Country A and Country B initially have the same real GDP per capita. Country A experiences no economic growth, while Country B grows at a sustained rate of 4 percent. In 36 years, Country A's GDP...

Q:

Q 1&2 1. Consider the standard aggregate supply and demand model that is in long run equilibrium. a. Explain why the aggregate demand curve is downward sloping. b. Explain why the short run aggregate...

Q:

1.Recall the Solow Model with population growth. Let aggregate production = 1 , s = .3, = .07, and = .5. In class, we considered a case where n was constant. In this problem, we'll consider a case...

Q:

Module 10. FINANCIAL INTERMEDIATION, MONEY & THE FEDERAL RESERVE SYSTEM What is money and why is it important to our economy? Are savings accounts money? Explain. Is U.S. currency backed by gold or...

Q:

(1) Which of the following will most likely cause an increase (shift to the right) in both the long-run and short-run aggregate supply curves? Group of answer choices an increase in the national debt...

Q:

1) Supply-side economics involves policy measures designed to Choices A-encourage technological progress B-remove unnecessary government regulations C-give investment tax credits to stimulate...

Q:

Question 1 (2.5 Marks) Explain why you agree or disagree with the following statement in quotations. Be sure to provide a thorough explanation. "Inflationary gaps and recessionary gaps are equally...

Q:

Rider University Dr. Brownschidle Eco 200- Spring 2024 Final Exam Directions: Answer all questions Explain your reasoning carefully and show your work in all calculations. All work on this exam must...

Q:

Final_Exam_Macro Question 1 (2 points) Purchasing-power panty theory does not hold at all times because many goods are not easily transported and the same goods produced in different countries may be...

Q:

Solve for A. [3] 4-69

Q:

John just finished his MBA degree and is about to start his career. He is very conservative and often thinks about his future. Therefore, John wants to set up a savings plan for his retirement life....

Q:

By leasing their lands to build wind farms instead of growing crops, a farmer s financial stability may worsenremain the sameimprove.

Q:

PLEASE ANSWER ( provide the solutions) A B C D E F G H Quantity Fixed Cost Variable Cost Total Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost N Q FC VC TC AFC AVC ATC...