All categories

2 years ago

If an economy is in short-run equilibrium that is below potential, what forces will bring the economy to long-run equilibrium?

1 answer:

5 0

If an economy is in short-run equilibrium that is below potential, the forces that will bring the economy to long-run equilibrium are new price level, nominal salaries, prices, and perceptions decrease.

Real GDP equilibrium and the short-run price level are determined by the junction of the economy's aggregate supply and demand curves. Its long-run equilibrium is determined by where aggregate demand and aggregate supply intersect.

The concept of the long run states that all markets are in equilibrium, all prices have fully adjusted, and all quantities are in equilibrium. The short-run, in contrast, is characterised by some limitations and a partial state of market equilibrium.

When enough time has passed and no factors have been fixed, the overall supply shifts from the short to the long term. Then, the new short-run and long-run equilibrium states are contrasted with that condition of equilibrium.

To learn more about equilibrium here

brainly.com/question/28081379

#SPJ4

You might be interested in

Muhares, which uses a process-costing system, adds material at the beginning of production and incurs conversion cost evenly thr

Lapatulllka [165]

Answer:

c). 60%

Explanation:

Calculation for what the ending work-in-process inventory's stage of completion is:

First step is to calculate the Units in process

Units in process = 8,000 - 6,500

Units in process= 1,500 units

Second step is to calculate Equivalent units of conversion for in process

Equivalent units of conversion for in process = 7,400 - 6,500

Equivalent units of conversion for in process= 900

Now let calculate the ending work-in-process inventory's stage of completion

Ending work-in-process inventory's stage of completion=900 / 1,500

Ending work-in-process inventory's stage of completion= 0.60*100

Ending work-in-process inventory's stage of completion=60%

Therefore the the ending work-in-process inventory's stage of completion is:60%

4 0

3 years ago

Both the medical model and the public health model have in common:

STALIN [3.7K]

<span>Both the medical model and the public health model have in common a desire to educate people about their health, healthy options, and consequences of not paying attention to health issues. The medical model may, at times, include too much information for some to understand the bottom-line, while the public health model may be watered down in an attempt to reach the masses.</span>

5 0

3 years ago

The discount rate assigned to an individual project should be based on: Group of answer choices the firm's weighted average cost

Inessa05 [86]

Answer:

none of the choices are correct

Explanation:

When the discount rate assigned for an individual project then it should be based on the risk i.e attached to the fund use needed by the project

There were various cases when a risky firm invested in a less risky project also if the same cost of capital is used so the firm could alter the decision of an investment in a negative manner

Therefore none of the choices are correct

3 0

3 years ago

Garden World uses the retail method to estimate its monthly cost of goods sold and month-end inventory. At May 31, the accountin

chubhunter [2.5K]

Answer:

The estimated inventory at May 31 is $352,549

Explanation:

In order to calculate the estimated inventory at May 31 we would have to calculate the following formula:

Estimated closing inventory=(resale of goods- sales in may)*(beginning inventory plus purchases/resale of goods

Estimated closing inventory=($1,020,000-$400,000)*($580,000)/$1,020,000)

Estimated closing inventory =($620,000*$580,000)/$1,020,000

Estimated closing inventory =$352,549

The estimated inventory at May 31 is $352,549

8 0

3 years ago

Cabell Products is a division of a major corporation. Last year the division had total sales of $25,060,000, net operating incom

lubasha [3.4K]

Answer:

The division's residual income is $75,180

Explanation:

Residual income : The residual income is that income which is left over after paying taxes and expenses

The formula to compute residual income

= Net operating income - (Average operating assets × minimum required rate of return)

= $1,503,600 - ($7,518,000 × 19%)

= $1,503,600 - $1,428,420

= $75,180

The total sale is irrelevant while computing the residual income. Thus, it is not considered in computation part.

Hence, The division's residual income is $75,180

6 0

3 years ago