1.) Use the line drawing tool to show the effects of a positive aggregate demand shock that might result from consumers becoming more optimistic. Properly label this line. Price Level, P LRAS1 2.) Use the point drawing tool to identify the new short run equilibrium. Label this point 'B'. A SRAS1 AD1 Output, Y

1.) Use the line drawing tool to show the effects of a positive aggregate demand shock that might result from consumers becoming more optimistic. Properly label this line. Price Level, P LRAS1 2.) Use the point drawing tool to identify the new short run equilibrium. Label this point 'B'. A SRAS1 AD1 Output, Y

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter17: The Trade-off Between Inflation And Unemploy

Section: Chapter Questions

Problem 1TY

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The short run aggregate supply curve was constructed assuming that as the price of outputs increases, the puce of inputs stays the same. How would an increase in the prices of important inputs, like energy, affect aggregate supply?
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