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A recession overseas causes foreigners to buy fewer U.5. goods. On the following graph, indicate the short-run and long-run effects of this change on the economy, assuming policymakers take no action. LRAS Aggregate Supply Aggregate Demand Price Level Aggregate Supply LRAS Aggregate Demand Quantity of Output decreases QUE increases remains unchanged In the short run, the price level and output decreases Quantity of Output remains unchanged increases In the short run, the price level and output lower higher In the short run, the price level unchanged 7 and output In the long run, the price level will be and output will be compared to the initial equilibrium prior to the change. lower In the short run, the price level and output unchanged In the long run, the price level will be and output will be compared to the initial equilibrium prior to the change.Suppose firms become very optimistic about future business conditions and invest heavily in new capital equipment. Show the short-run effect of this optimism on the aggregate-demand curve. ? LRAS Aggregate Supply Aggregate Demand -O Price Level Aggregate Supply A LRAS Aggregate Demand Quantity of Output Which of the following reasons could explain why the aggregate quantity of output supplied changes? Check all that apply. The price level has risen. O Wages are not sticky. prices are sticky. People have misperceptions about the price level. On the preceding graph, show what happens to t e short-run aggregate-supply curve in the long run. (Note: For now, assume there is no change in the long run aggregate supply curve.) The aggregate quantity of output demanded between the short run and the long run because the price level The investment boom might cause the long- decreases supply curve to shift to the _ if it results in a larger capital stock that increases productivity and output in the future. increases On the preceding graph, show what happens to the short-run aggregate-supply curve in the long run. (Note: For now, assume there is no change in the long-run aggregate supply curve.) The aggregate quantity of output demanded between the short run and the long run because the price level The investment boomn might cause the long-run aggregate supply curve to shift to the _ if it results in a larger capital sto rises herease productivity and output in the future. falls On the preceding graph, show what happens to the short-run aggregate-supply curve in the long run. (Note: For now, assume there is no change in the long-run aggregate-supply curve.) left The aggregate quantity of output demanded between the short run ar right ing run because the price level . The investment boom might cause the long-run aggregate-supply curve to shift to the * if it results in a larger capital stock that increases productivity and output in the future
