Refer to Figure 16-1. Suppose the economy is in short-run equilibrium below potential GDP and no fiscal or monetary policy is pursued. Using the basic AD-AS model in the figure above, this would be depicted as a movement from OC to B. O A to E. OB to A. OB to C. A to B.

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
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Chapter24: The Aggregate Demand/aggregate Supply Model
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Figure 16-1
Price level
LRAS
X
D
B.
3
L
SRAS
AD3
AD₂
AD₁
Real GDP
Refer to Figure 16-1. Suppose the economy is in short-run equilibrium below potential GDP and
no fiscal or monetary policy is pursued. Using the basic AD-AS model in the figure above, this
would be depicted as a movement from
O C to B.
A to E.
B to A.
B to C.
A to B.
Transcribed Image Text:Figure 16-1 Price level LRAS X D B. 3 L SRAS AD3 AD₂ AD₁ Real GDP Refer to Figure 16-1. Suppose the economy is in short-run equilibrium below potential GDP and no fiscal or monetary policy is pursued. Using the basic AD-AS model in the figure above, this would be depicted as a movement from O C to B. A to E. B to A. B to C. A to B.
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