economics i don’t understand this work
1. Suppose
that
the
long-‐run
aggregate
supply
curve
is
positioned
at
a
real
GDP
level
of
$15
trillion
in
base-‐year
dollars,
and
the
long-‐run
equilibrium
price
level
(in
index
number
form)
is
115.
Mention
3
factors
that
could
explain
why
the
economy
could
move
to
a
new
equilibrium
at
a
real
GDP
level
of
$15
trillion
in
base
year
dollars
and
the
price
level
(in
index
number
form)
of
105.
2. Suppose
an
economy
in
long
and
short
run
equilibrium.
Explain
what
will
happen
to
the
equilibrium
price
level
and
real
GDP
level
in
the
short
run
following
each
of
these
events:
a.
An
appreciation
of
the
domestic
currency
relative
to
other
world
currencies.
b. An
increase
in
the
quantity
of
money
in
circulation.
c. A
decrease
in
taxes.
d. An
improvement
in
the
prospects
of
the
economy
that
encourages
businesses
to
increase
investment.
3. Assume
that
the
position
of
a
nation’s
aggregate
demand
curve
has
not
changed,
but
the
long-‐run
equilibrium
price
level
has
declined.
Other
things
being
equal,
which
of
the
following
factors
might
account
for
this
event?
a.
An
increase
in
labor
productivity
b.
A
decrease
in
the
capital
stock
c.
A
decrease
in
the
quantity
of
money
in
circulation
d.
The
discovery
of
new
mineral
resources
used
to
produce
various
goods
e.
A
technological
improvement
4. Consider
an
economy
in
equilibrium
in
the
short
run.
Explain
how
the
following
changes
affect
the
equilibrium:
a. Significant
fall
in
oil
prices
occur.
b. The
quantity
of
money
in
circulation
increases.
c. Significant
fall
in
oil
prices
occur
occur
and
the
quantity
of
money
in
circulation
increases.
d. There
has
been
a
war,
with
destruction
of