Consider the aggregate supply-aggregate demand (AD-AS) model that we saw in class. Assume that prices are fixed in the short run and are fully flexible in the long run. The initial full-employment level of output is y-900 and the initial price level is p=100: The aggregate demand curve is given by y=1500 – 6P: Scenario 3, long run: A major pandemic results in job losses, greater precautionary saving, and shutdowns and social-distancing policies. As a result, the full- employment level of output drops to y =830 and the demand curve shifts to y =1445-6P. In the long run, the output is and the price level is Note: Type in your answer rounded to two decimal places, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were entered incorrectly, such as "999.999" or "999,99" or "999". In case the last digit in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard may automatically delete it and you should not do anything about it. In case of percentages, do not type in the percentage symbol "%".
Consider the aggregate supply-aggregate demand (AD-AS) model that we saw in class. Assume that prices are fixed in the short run and are fully flexible in the long run. The initial full-employment level of output is y-900 and the initial price level is p=100: The aggregate demand curve is given by y=1500 – 6P: Scenario 3, long run: A major pandemic results in job losses, greater precautionary saving, and shutdowns and social-distancing policies. As a result, the full- employment level of output drops to y =830 and the demand curve shifts to y =1445-6P. In the long run, the output is and the price level is Note: Type in your answer rounded to two decimal places, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were entered incorrectly, such as "999.999" or "999,99" or "999". In case the last digit in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard may automatically delete it and you should not do anything about it. In case of percentages, do not type in the percentage symbol "%".
Chapter20: Aggregate Demand And Supply
Section: Chapter Questions
Problem 8SQP
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