Oraw AS/AD curve with the initial curves represented with ASa and ADo and the equilibrium with point A Then show the effect of a rise in government expenditure with point B. Then show the long run adjustment with point C. Explain it in details. s the price level in point C higher/lower than point AP Why? Explain. s the output level in point C higher/lower than point AP Why? Explain.

Oraw AS/AD curve with the initial curves represented with ASa and ADo and the equilibrium with point A Then show the effect of a rise in government expenditure with point B. Then show the long run adjustment with point C. Explain it in details. s the price level in point C higher/lower than point AP Why? Explain. s the output level in point C higher/lower than point AP Why? Explain.

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 3WNG

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Draw AS/AD curve with the initial curves represented with AS0 and AD0 and the equilibrium with point A.Then show the short run effect of a war with point B.Then add the short run effect of a decline in government expenditure with point C.Is the price level in point C definitely higher/lower than point A? Is the output level in point C definitely higher/lower thanpoint A?
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