4. Suppose that over a five-year period, nominal GDP increases by 5 percent while real GDP decreases by 5 percent. a. What has happened to the level of output of this economy during this five-year period? Explain your reasoning briefly. b. What has happened to the level of prices during this five-year period? Explain your reasoning briefly. c. Use an aggregate demand-aggregate supply graph to show shift(s) of curves that would lead to this result.
4. Suppose that over a five-year period, nominal GDP increases by 5 percent while real GDP decreases by 5 percent. a. What has happened to the level of output of this economy during this five-year period? Explain your reasoning briefly. b. What has happened to the level of prices during this five-year period? Explain your reasoning briefly. c. Use an aggregate demand-aggregate supply graph to show shift(s) of curves that would lead to this result.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter24: The Aggregate Demand/aggregate Supply Model
Section: Chapter Questions
Problem 42CTQ: On a microeconomic demand curve, a decrease in price causes an increase in quantity demanded because...
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