The economy is depicted by the graph to the right. It is presently operating at point A. 160- Suppose that the central bank attempts to expand the economy through purchasing US government securities. LRAS 140- 1.) Using the line drawing and or the 3-point curved line drawing tools, show the effect of this shock, assuming the policy is not anticipated by the public. Properly label your new curve or SRAS curves. 120- 2.) Using the point drawing tool, identify the new short-run equilibrium point. Label this point 'H'. ADDA LABEL 100- Carefully follow the instructions above, and only draw the required objects. AD1 80- H 60- SRAS1 40- 4 10 12 14 16 Real GDP ($ trillions) 18 20 Price level

The economy is depicted by the graph to the right. It is presently operating at point A. 160- Suppose that the central bank attempts to expand the economy through purchasing US government securities. LRAS 140- 1.) Using the line drawing and or the 3-point curved line drawing tools, show the effect of this shock, assuming the policy is not anticipated by the public. Properly label your new curve or SRAS curves. 120- 2.) Using the point drawing tool, identify the new short-run equilibrium point. Label this point 'H'. ADDA LABEL 100- Carefully follow the instructions above, and only draw the required objects. AD1 80- H 60- SRAS1 40- 4 10 12 14 16 Real GDP ($ trillions) 18 20 Price level

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 8PA

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