The following graph shows an increase in aggregate demand in a hypothetical country. Specifically, aggregate demand shifts to the right from AD₁ to AD2₂, causing the quantity of output demanded to rise at all price levels. For example, at a price level of 140, output is now $400 billion, where previously it was $300 billion. PRICE LEVEL 170 160 150 140 120 110 100 90 0 100 AD2 200 300 400 500 OUTPUT (Billions of dollars) AD₁ 600 700 800 ?

The following graph shows an increase in aggregate demand in a hypothetical country. Specifically, aggregate demand shifts to the right from AD₁ to AD2₂, causing the quantity of output demanded to rise at all price levels. For example, at a price level of 140, output is now $400 billion, where previously it was $300 billion. PRICE LEVEL 170 160 150 140 120 110 100 90 0 100 AD2 200 300 400 500 OUTPUT (Billions of dollars) AD₁ 600 700 800 ?

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter33: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 5PA

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