An economy's apgregate demand curve isven as AD 00.6SY, With an increase in foreign income, the level of exports increases by 235 bilion what wi happen to real GDP in thes ecanomySelect one4 Real GDP wi increase by approimatly 02 blonO Maal GOe s unatfected by changes in exposOc GOP wi dere y prmaly onO. R GOP wil de y pproimatty onO. el GO wil ince byrimaty 71 bon

AD is teh summation of all expenditure such as Consumption, investment, government spending and net…

An economy's aggregate demand curve is gven as AD6800.6SY, With an increase in foreign income, the ievel of exports increases by E2 bilion Whut will happen to real GDP in this economy Select one 24 Real GDP wi increase b appromtly 012 blon O Meal GOP unaeted by changes in expom OC GO will deeey r ly on O. Real GOP wil dec by promatly on O.e GDP wil incisane y apraimaty TI

An economy's aggregate demand curve is gven as AD6800.6SY, With an increase in foreign income, the ievel of exports increases by E2 bilion Whut will happen to real GDP in this economy Select one 24 Real GDP wi increase b appromtly 012 blon O Meal GOP unaeted by changes in expom OC GO will deeey r ly on O. Real GOP wil dec by promatly on O.e GDP wil incisane y apraimaty TI

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section: Chapter Questions

Problem 2TY

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Congratulationst You have been appointed an economic policy adviser to the United States, You are told that the economy is significantly abowe futtemplyoment GDP. Based on this inlormation, how can the economy would adjust to reach LR.SR Equilbrium (Classical View)? The economy wilt experience low unemployment rate, pushing wages up, and increasing the pelces of a key input (labor). shatting the sAS to the left (up). The economy will experience high unemployment rate, pushing wages down, and reducing the prices of a key input (labor). shiting the SAS to the right (down). The econoriny wil experience low unemployment rate, decreasing inceme, which will eventually shift the AD to the left. The eooncmy will experience low unemployment rate, pushing wages up, and increasing the prices of a key input (labor), shiting the sAs to the night (down).
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