question 2:In Figure 2, what are the factors that may cause the aggregate demand to shift from AD to AD1?What is the difference between demand pull inflation, cost push inflation, and recession? PriceLevelP1PThe Keynesian AS curveYeASYfUp to real output level yfincreases in AD have no effecton the price level. Increasesin AD beyond Yf cause anincrease in the price levelbut no increase in real output.AD¹AD2ADCopyright: www.economicsonline.co.ukNational income(real GDP)

Inter an economy, aggregate demand refers to the total amount bof domestic output demanded by…

Price Level P1 The Keynesian AS curve Yo AS Yf Up to real output level yf increases in AD have no effect on the price level. Increases in AD beyond Yf cause an increase in the price level but no increase in real output. AD1 AD2 AD Copyright: www.economicsonline.co.uk National income (real GDP)

Price Level P1 The Keynesian AS curve Yo AS Yf Up to real output level yf increases in AD have no effect on the price level. Increases in AD beyond Yf cause an increase in the price level but no increase in real output. AD1 AD2 AD Copyright: www.economicsonline.co.uk National income (real GDP)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter22: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 1P

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Question

question 2:

In Figure 2, what are the factors that may cause the aggregate demand to shift from AD to AD1?

What is the difference between demand pull inflation, cost push inflation, and recession?

Price
Level
P1
P
The Keynesian AS curve
Ye
AS
Yf
Up to real output level yf
increases in AD have no effect
on the price level. Increases
in AD beyond Yf cause an
increase in the price level
but no increase in real output.
AD¹
AD2
AD
Copyright: www.economicsonline.co.uk
National income
(real GDP)

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