To illustrate : That fluctuations happens only in inflation.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 17, Problem 1TY

To determine

To illustrate: That fluctuations happens only in inflation.

Expert Solution & Answer

Answer to Problem 1TY

The supply curve has been explained.

Explanation of Solution

When the supply curve is vertical, the change in price adjusts any types of fluctuation in growth of aggregate demand, which is explained in the below shown figure. In the figure x−axis gives the measure of output while y−axis provides the price level.

The output supply is fixed, for which the supply curve will be vertical. There is a shift in the demand curve from D1 to D2 according to increase in the aggregate demand. Also, the price level increases from P1 to P2 with the increase in demand, and the supply curve is vertical. There will be no change in the output, which remains at OQ level.

MACROECONOMICS, Chapter 17, Problem 1TY

Economics Concept Introduction

Introduction: The relationship between supply of quantity and cost of goods or services, when represented graphically, it is called a supply curve.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Suppose that government decides to support the firms for their investments in research and the development.Assuming this support increases productivity in the economy, use aggregate demand and supply analysis to predict the short-run and long-run effects on inflation and output. Show these effects on a graph and explain the results in detail.

Suppose that the inflation rate remains constant while output increases and the unemployment rate decreases. Using an aggregate demand and supply graph, show how this scenario is possible.

I can't find anything to back up that a decrease in aggregate demand causes cost push inflation. My textbook does mention the increase in aggregate supply. I thought that a decrease in price generally meant deflation? And doesn't the decrease (left shift) in aggregate demand result in lower prices?

Answer 2

Question

Chapter 17, Problem 1TY

To determine

To illustrate: That fluctuations happens only in inflation.

Expert Solution & Answer

Answer to Problem 1TY

The supply curve has been explained.

Explanation of Solution

When the supply curve is vertical, the change in price adjusts any types of fluctuation in growth of aggregate demand, which is explained in the below shown figure. In the figure x−axis gives the measure of output while y−axis provides the price level.

The output supply is fixed, for which the supply curve will be vertical. There is a shift in the demand curve from D1 to D2 according to increase in the aggregate demand. Also, the price level increases from P1 to P2 with the increase in demand, and the supply curve is vertical. There will be no change in the output, which remains at OQ level.

MACROECONOMICS, Chapter 17, Problem 1TY

Economics Concept Introduction

Introduction: The relationship between supply of quantity and cost of goods or services, when represented graphically, it is called a supply curve.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 17, Problem 1TY

To determine

To illustrate: That fluctuations happens only in inflation.

Expert Solution & Answer

Answer to Problem 1TY

The supply curve has been explained.

Explanation of Solution

When the supply curve is vertical, the change in price adjusts any types of fluctuation in growth of aggregate demand, which is explained in the below shown figure. In the figure x−axis gives the measure of output while y−axis provides the price level.

The output supply is fixed, for which the supply curve will be vertical. There is a shift in the demand curve from D1 to D2 according to increase in the aggregate demand. Also, the price level increases from P1 to P2 with the increase in demand, and the supply curve is vertical. There will be no change in the output, which remains at OQ level.

MACROECONOMICS, Chapter 17, Problem 1TY

Economics Concept Introduction

Introduction: The relationship between supply of quantity and cost of goods or services, when represented graphically, it is called a supply curve.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 17, Problem 1TY

To determine

To illustrate: That fluctuations happens only in inflation.

Expert Solution & Answer

Answer to Problem 1TY

The supply curve has been explained.

Explanation of Solution

When the supply curve is vertical, the change in price adjusts any types of fluctuation in growth of aggregate demand, which is explained in the below shown figure. In the figure x−axis gives the measure of output while y−axis provides the price level.

The output supply is fixed, for which the supply curve will be vertical. There is a shift in the demand curve from D1 to D2 according to increase in the aggregate demand. Also, the price level increases from P1 to P2 with the increase in demand, and the supply curve is vertical. There will be no change in the output, which remains at OQ level.

MACROECONOMICS, Chapter 17, Problem 1TY

Economics Concept Introduction

Introduction: The relationship between supply of quantity and cost of goods or services, when represented graphically, it is called a supply curve.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 17, Problem 1TY

To determine

To illustrate: That fluctuations happens only in inflation.

Expert Solution & Answer

Answer to Problem 1TY

The supply curve has been explained.

Explanation of Solution

When the supply curve is vertical, the change in price adjusts any types of fluctuation in growth of aggregate demand, which is explained in the below shown figure. In the figure x−axis gives the measure of output while y−axis provides the price level.

The output supply is fixed, for which the supply curve will be vertical. There is a shift in the demand curve from D1 to D2 according to increase in the aggregate demand. Also, the price level increases from P1 to P2 with the increase in demand, and the supply curve is vertical. There will be no change in the output, which remains at OQ level.

MACROECONOMICS, Chapter 17, Problem 1TY

Economics Concept Introduction

Introduction: The relationship between supply of quantity and cost of goods or services, when represented graphically, it is called a supply curve.

Answer 6

Chapter 17, Problem 1TY

To determine

To illustrate: That fluctuations happens only in inflation.

Expert Solution & Answer

Answer to Problem 1TY

The supply curve has been explained.

Explanation of Solution

When the supply curve is vertical, the change in price adjusts any types of fluctuation in growth of aggregate demand, which is explained in the below shown figure. In the figure x−axis gives the measure of output while y−axis provides the price level.

The output supply is fixed, for which the supply curve will be vertical. There is a shift in the demand curve from D1 to D2 according to increase in the aggregate demand. Also, the price level increases from P1 to P2 with the increase in demand, and the supply curve is vertical. There will be no change in the output, which remains at OQ level.

MACROECONOMICS, Chapter 17, Problem 1TY

Economics Concept Introduction

Introduction: The relationship between supply of quantity and cost of goods or services, when represented graphically, it is called a supply curve.

Answer 7

Chapter 17, Problem 1TY

To determine

To illustrate: That fluctuations happens only in inflation.

Answer 8

Expert Solution & Answer

Answer to Problem 1TY

The supply curve has been explained.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

When the supply curve is vertical, the change in price adjusts any types of fluctuation in growth of aggregate demand, which is explained in the below shown figure. In the figure x−axis gives the measure of output while y−axis provides the price level.

The output supply is fixed, for which the supply curve will be vertical. There is a shift in the demand curve from D1 to D2 according to increase in the aggregate demand. Also, the price level increases from P1 to P2 with the increase in demand, and the supply curve is vertical. There will be no change in the output, which remains at OQ level.

MACROECONOMICS, Chapter 17, Problem 1TY

Answer 12

Economics Concept Introduction

Introduction: The relationship between supply of quantity and cost of goods or services, when represented graphically, it is called a supply curve.

Answer 13

Ch. 17 - Prob. 1TY Ch. 17 - Prob. 2TY Ch. 17 - Prob. 1DQ Ch. 17 - Prob. 2DQ Ch. 17 - Prob. 3DQ Ch. 17 - Prob. 4DQ Ch. 17 - Prob. 5DQ Ch. 17 - Prob. 6DQ Ch. 17 - Prob. 7DQ Ch. 17 - Prob. 8DQ

To illustrate : That fluctuations happens only in inflation.

To illustrate: That fluctuations happens only in inflation.

Answer to Problem 1TY

Explanation of Solution

Want to see more full solutions like this?

Chapter 17 Solutions