6:45 PM suffolku.blackboard.com AT&T; SECTION THREE: Explain for each event whet
ID: 1108922 • Letter: 6
Question
6:45 PM suffolku.blackboard.com AT&T; SECTION THREE: Explain for each event whether it changes the short- run aggregate supply, long-run aggregate supply, or a combination of the two, and how and why . a)Automotive firms in the United States switch to a new technology that raises productivity b)Toyota and Honda build additional plants in the United States. c)The price of auto parts imported from China rises. d) Autoworkers agree to a cut in the nominal wage rate. In Japan, potential GDP is 600trillion yen. The table shows real GDP supplied in short run and AD Real GDP Real GDP suppliedi AD the short run (trillions of 2000 yen) 600 550 85 95 105 115 125 135 450 400 350 300 650 700 e) Draw a graph of the AD and SAS curve.Explanation / Answer
a) Long run aggregate supply curve will shift this is because in long run only output can be changed due to improvement in productivity. In short run output cannot be changed.
b) Long run aggregate supply will shift because building additional plant is along run phenomenon. It takes time to bulid additional plant.
c) Short run aggregate supply will shift because of increase in demand of auto price in US and World .
d) Short run aggregate will shift with a lag of one period because nominal tax cut has effect on short run.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.