Suppose the economy is self-regulating, the price level is 132, the quantity demanded of Real GDP is 4 trillion, the quantity supplied of Real GDP in the short run is 3.9 trillion, and the quantity supplied of Real GDP in the long run is 4.3 trillion. Is the economy in short-run equilibrium? Will the price level in long-run equilibrium be greater than, less than, or equal to 132? Show the relevant graph and explain your answers.

Suppose the economy is self-regulating, the price level is 132, the quantity demanded of Real GDP is 4 trillion, the quantity supplied of Real GDP in the short run is 3.9 trillion, and the quantity supplied of Real GDP in the long run is 4.3 trillion. Is the economy in short-run equilibrium? Will the price level in long-run equilibrium be greater than, less than, or equal to 132? Show the relevant graph and explain your answers.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 10SCQ: Many financial analysts and economists eagerly await the press releases for the reports on the home...

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