The economy has a self-stabilizing tendency due to long-run movements in the AS curve. If equilibrium real output is below potential output, explain what would cause the equilibrium output to increase.

The economy has a self-stabilizing tendency due to long-run movements in the AS curve. If equilibrium real output is below potential output, explain what would cause the equilibrium output to increase.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter10: Aggregate Demand And Supply

Section10.A: The Self Correcting Aggregate Demand And Supply Model

Problem 7SQ

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