Consider the figure to the right. Suppose that businesses in this nation initially had been exporting significant amounts of domestically produced goods and services abroad. Assume that other mations of the world have experienced a sudden improvement in economic conditions. What happens to the nation's aggregate demand curve? In the short run, will the nation experience an nflationary gap or a recessionary gap? Explain. 1.) Using the line drawing tool, draw a new AD curve that shows the effects of a sudden improvement in economic conditions in other nations. Label your line 'AD₂. 2) Using the point drawing tool, indicate the economy's new short-run equilibrium price and level of real GDP. Label this point 'E₂. Carefully follow the instructions above, and only draw the required objects. In the short run, the equilibrium price level will at full employment. and the nation will experience gap because the short-run equilibrium level of real GDP per year is real GDP

Consider the figure to the right. Suppose that businesses in this nation initially had been exporting significant amounts of domestically produced goods and services abroad. Assume that other mations of the world have experienced a sudden improvement in economic conditions. What happens to the nation's aggregate demand curve? In the short run, will the nation experience an nflationary gap or a recessionary gap? Explain. 1.) Using the line drawing tool, draw a new AD curve that shows the effects of a sudden improvement in economic conditions in other nations. Label your line 'AD₂. 2) Using the point drawing tool, indicate the economy's new short-run equilibrium price and level of real GDP. Label this point 'E₂. Carefully follow the instructions above, and only draw the required objects. In the short run, the equilibrium price level will at full employment. and the nation will experience gap because the short-run equilibrium level of real GDP per year is real GDP

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter20: Aggregate Demand And Supply

Section: Chapter Questions

Problem 7SQP

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