The following graph shows a decrease in short-run aggregate supply (AS) in a hypothetical economy where the currency is the dollar. Specifically, the short-run aggregate supply curve shifts to the left from AS₁ to AS2, causing the quantity of output supplied at a price level of 100 to fall from $200 billion to $150 billion.
The following graph shows a decrease in short-run aggregate supply (AS) in a hypothetical economy where the currency is the dollar. Specifically, the short-run aggregate supply curve shifts to the left from AS₁ to AS2, causing the quantity of output supplied at a price level of 100 to fall from $200 billion to $150 billion.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter23: Aggregate Demand And Aggregate Supply
Section: Chapter Questions
Problem 3CQQ
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Please give a detailed answer to the below question.
Options For Fill In Blanks:
higher or lower
increase or decrease
improves or declines
Transcribed Image Text:7. Determinants of aggregate supply
The following graph shows a decrease in short-run aggregate supply (AS) in a hypothetical economy where the currency is the dollar. Specifically, the
short-run aggregate supply curve shifts to the left from AS1 to AS2, causing the quantity of output supplied at a price level of 100 to fall from $200
billion to $150 billion.
200
AS
175
AS,
150
125
100
50
25
50
100
150
200
250
300
350
400
QUANTITY OF OUTPUT
The following table lists several determinants of short-run aggregate supply.
PRICE LEVEL
Transcribed Image Text:The following table lists several determinants of short-run aggregate supply.
Fill in the table by indicating the changes in the determinants necessary to decrease short-run aggregate supply.
Change Needed to Decrease AS
Inflation expectations
Tax rates
Technology
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