(Solved): Consider an AS curve that is positively sloped. The slope of the AS curve in this case captures th ...

Consider an AS curve that is positively sloped. The slope of the AS curve in this case captures the fact that when aggregate output increases Both nominal and real wages increase Neither nominal wages nor real wages increase Nominal wages remain unchanged Real wages remain unchanged The movement along the AD curve from left to right is equivalent to a shift of the IS curve to the right due to a decrease in interest rates the LM curve to the right due to an increase in nominal money supply the LM curve to the right due to an increase in real money balances O the IS curve to the right due to a lower price level Consider an economy in long-run equilibrium at P?,Y*. Government increases spending. What will be the new long-run equilibrium? Price will be higher than P1 and output will be higher than the natural output. Price will be higher than P1 and output will be smaller than the natural output. Price will be higher than P? and output will be equal to the natural output. Price will be lower than P1 and output will be equal to the natural output. In the long run The equilibrium is identified by the intersection of AD and AS The AS converges to the LAS O The labour market is in equilibrium because wages become flexible The labour market can be in disequilibrium but the economy is at full employment