ECONOMICS
AGGREGATE DEMAND
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
a decrease in consumer spending
|
|
|
a decrease in the price of imported oil
|
|
|
an increase in the price of imported oil
|
|
|
an increase in consumer spending
|
Detailed explanation-1: -The answer is: C) an increase in the price of imported oil.
Detailed explanation-2: -The aggregate supply curve shifts to the left as the price of key inputs rises, making a combination of lower output, higher unemployment, and higher inflation possible. When an economy experiences stagnant growth and high inflation at the same time it is referred to as stagflation.
Detailed explanation-3: -Which of the following will cause the short-run aggregate supply curve to shift to the right? c. A decrease in wages. Anything that makes it cheaper to produce will cause the AS curve to increase (shift right) because firms will be willing to produce more at any given price.
Detailed explanation-4: -What causes shifts in SRAS? When the price level changes and firms produce more in response to that, we move along the SRAS curve. But, any change that makes production different at every possible price level will shift the SRAS curve. Events like these are called “shocks” because they aren’t anticipated.
Detailed explanation-5: -The short-run aggregate supply curve will shift to the: left if nominal wages increase. Potential output: is the level of output that the economy would produce if all prices, including nominal wages, were fully flexible.