A support level is the price at which a stock generates interest from a sufficient number of buyers to cause a price spike. This means that at each given price level for outputs, a higher price for inputs will discourage production because it will reduce the possibilities for earning profits. So, option 'b' is correct. The correct answer is D. An increase in the expected price level shifts short-run aggregate supply to the left but an increase in the actual price level does not shift short-run aggregate supply. • What are the other factors z?One example is unemployment insurance. The interactive graph below (Figure 2) shows the aggregate supply curve shifting to the left, from SRAS 0 to SRAS 1 … The higher nominal interest rate increases the cost of holding money and therefore reduces the demand for real money balances. Definition. In the long run, the changes in the expected price level will not affect the aggregate supply because the period will be long enough to materialize the expected and actual price levels. increases consumption spending) ... workers and firms must increase prices and wages to compensate for inflation/increased price level) Term. A higher price level increases output, if the expected price level does not change, since the real wage rate decreases. Short Run Aggregate Supply shifts left Suppose the expected price level is 130. of an important natural resource. If the price level turns out to be 130 à producers supply the economy’s potential output à unemployment is at the natural rate. Because the Fed has not changed the quantity of money available today, the reduced demand for real money balances leads to a higher price level. The exchange rate has an important relationship to the price level because it represents a link between domestic prices and foreign prices. The long-run curve is unaffected by a change in the expected price level or the actual price level. • Why does the expected price level P e matter (not the actual price level P)? As technical indicators go, a resistance level takes some of the ambiguity out of trading. Other examples of z include the minimum wage. PPP: gross domestic product at purchasing power parity adjusts for price level differences across countries, providing a better measure of the volume of goods and services produced. Unexpected increase in the price. The highest price level among EU Member States was observed in Denmark, 41% above the EU average, while in Bulgaria the price level was 47% below the EU average. Why is a resistance level significant? • Why does the unemployment rate u matter? (Because: optimism on expected income . If there is no unemployment insurance, then you would be willing to accept very low wages to avoid being unemployed. 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