In the diagram, the economy hasAggregateprice levelLRASSRAS,P,AggregateDemandYpY,Real GDPAn inflationary gap, so in the long run wages will fall, causing AD curve ti shift to the left.An inflationary gap, so in the long run wages will rise, causing the SRAS curve to shift to the left.O A recessionary gap, so in the long run wages will fall, causing the AD curve to shift to the left.O A recessionary gap, so in the long run wages will fall, causing the SRAS curve to shift to the right.

An economy is an enormous arrangement of related production and utilization exercises that guide it…

Answered: Aggregate price level LRAS SRAS,

Business

Economics

Aggregate price level LRAS SRAS,

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter34: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 4CQQ

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