WGU D089 MODULE 8 EXAM QUESTIONS AND ALL
ANSWERS CORRECT
Create a demand aggregate graph. Ensure the axis is labeled.
Price is on the vertical axis, and GDP is on the horizontal axis.
How does a rise in the economy's price level affect the amount of GDP
demanded? Use your graph to demonstrate this.
It results in a decrease in the amount of money spent on domestic products and
services.
Enumerate and describe the elements that make up aggregate demand.
Spending on consumption rises in tandem with disposable income, and AD
moves to the right. AD moves to the left when consumption spending declines
along with disposable income.
Businesses that spend money on investments base their choices on how the
products will impact their earnings; as investments decline, the AD moves to
the left, and as investments rise, the AD moves to the right.
Spending by the government:
net export spending, or exports less imports. C + I + G + x - M
Determine the elements that cause AD to shift.
The effects of wealth, interest rates, and international prices
Create a short-run AS graph, being sure to identify each axis.
Real GDP is horizontal, whereas price level is vertical.
Why does the SRAS short-run AS curve slope upward?
AS rises in tandem with the price.
The long run AS curve (LRAS) is vertical; why is that?
The amount of real GDP delivered remains constant regardless of price.
, What connection exists between full-employment GDP, potential GDP, and the
LRAS?
Potential GDP, or LRAS, is another name for LRAS. When an economy is
making the most of its workers and resources, unemployment is low.
Determine the elements that cause the LRAS curve to alter.
Productivity growth is the amount of output that can be generated using a
specific amount of capital or labor.
Determine the elements that cause the SRAS curve to alter.
Anything that causes the LRAS to change will also cause the SRAS to change
in the same way. Examples of this include technological advancements, pay
increases or decreases, productivity losses, or rising fuel prices.
Explain what occurs in each of the following cases using the AS-AD paradigm.
Start each scenario with a graph that depicts the economy's long-term
equilibrium. Make the proper curve movement. Determine the new equilibrium
that explains the changes in GDP and price. Determine if the modification
creates an expansionary or recessionary gap in each instance.
A) A rise in consumer confidence
B) Wages rise
C) Higher labor productivity results from more capital.
The AD-AS (aggregate demand-aggregate) model
model that illustrates the factors that affect the economy's total supply and
demand as well as the macroeconomic interactions between the two.
Supply Aggregate (AS)
The entire range of products and services that a specific market can offer.
Curve of Aggregate Demand
demonstrates the factors that affect output and pricing as well as how they
evolve over time. It displays the total amount spent on domestic products and
services at each price point. represents the connection between the overall level
of prices and the total amount spent on finished goods and services. Aggregate
refers to total.
ANSWERS CORRECT
Create a demand aggregate graph. Ensure the axis is labeled.
Price is on the vertical axis, and GDP is on the horizontal axis.
How does a rise in the economy's price level affect the amount of GDP
demanded? Use your graph to demonstrate this.
It results in a decrease in the amount of money spent on domestic products and
services.
Enumerate and describe the elements that make up aggregate demand.
Spending on consumption rises in tandem with disposable income, and AD
moves to the right. AD moves to the left when consumption spending declines
along with disposable income.
Businesses that spend money on investments base their choices on how the
products will impact their earnings; as investments decline, the AD moves to
the left, and as investments rise, the AD moves to the right.
Spending by the government:
net export spending, or exports less imports. C + I + G + x - M
Determine the elements that cause AD to shift.
The effects of wealth, interest rates, and international prices
Create a short-run AS graph, being sure to identify each axis.
Real GDP is horizontal, whereas price level is vertical.
Why does the SRAS short-run AS curve slope upward?
AS rises in tandem with the price.
The long run AS curve (LRAS) is vertical; why is that?
The amount of real GDP delivered remains constant regardless of price.
, What connection exists between full-employment GDP, potential GDP, and the
LRAS?
Potential GDP, or LRAS, is another name for LRAS. When an economy is
making the most of its workers and resources, unemployment is low.
Determine the elements that cause the LRAS curve to alter.
Productivity growth is the amount of output that can be generated using a
specific amount of capital or labor.
Determine the elements that cause the SRAS curve to alter.
Anything that causes the LRAS to change will also cause the SRAS to change
in the same way. Examples of this include technological advancements, pay
increases or decreases, productivity losses, or rising fuel prices.
Explain what occurs in each of the following cases using the AS-AD paradigm.
Start each scenario with a graph that depicts the economy's long-term
equilibrium. Make the proper curve movement. Determine the new equilibrium
that explains the changes in GDP and price. Determine if the modification
creates an expansionary or recessionary gap in each instance.
A) A rise in consumer confidence
B) Wages rise
C) Higher labor productivity results from more capital.
The AD-AS (aggregate demand-aggregate) model
model that illustrates the factors that affect the economy's total supply and
demand as well as the macroeconomic interactions between the two.
Supply Aggregate (AS)
The entire range of products and services that a specific market can offer.
Curve of Aggregate Demand
demonstrates the factors that affect output and pricing as well as how they
evolve over time. It displays the total amount spent on domestic products and
services at each price point. represents the connection between the overall level
of prices and the total amount spent on finished goods and services. Aggregate
refers to total.
