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The following is an aggregate demand and aggregate supply model. ASLA AS2 AS, P3 P2 AD2 AD1 Q, Real output Assume that the economy is initially in equilibrium at AD1 and AS1 and the real domestic output will be (b) If there is demand pull inflation, then in the short run, the new equilibrium is at point and real domestic output at, (c) In the long run, the nominal wages will rise so that aggregate supply curve shifts from The new equilibrium will be at point (a) The Price level will be with the price level at with the price level at _to _and real domestic output at so the increase in the aggregate demand has only moved the economy along its, (d) Assume that the economy is now initially at equilibrium point W, where the AD 1 intersects the AS1. If there is cost push inflation then: a. In the short run, the new equilibrium point is at point curve. the price level at and real domestic output at, Price level

The following is an aggregate demand and aggregate supply model. ASLA AS2 AS, P3 P2 AD2 AD1 Q, Real output Assume that the economy is initially in equilibrium at AD1 and AS1 and the real domestic output will be (b) If there is demand pull inflation, then in the short run, the new equilibrium is at point and real domestic output at, (c) In the long run, the nominal wages will rise so that aggregate supply curve shifts from The new equilibrium will be at point (a) The Price level will be with the price level at with the price level at _to _and real domestic output at so the increase in the aggregate demand has only moved the economy along its, (d) Assume that the economy is now initially at equilibrium point W, where the AD 1 intersects the AS1. If there is cost push inflation then: a. In the short run, the new equilibrium point is at point curve. the price level at and real domestic output at, Price level

Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter10: Dynamic Change, Economic Fluctuations, And The Ad-as Model
Section: Chapter Questions
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The following is an aggregate demand and aggregate supply model. ASLA AS2 AS, P3 P2 AD2 AD1 Q, Real output Assume that the economy is initially in equilibrium at AD1 and AS1 and the real domestic output will be (b) If there is demand pull inflation, then in the short run, the new equilibrium is at point and real domestic output at, (c) In the long run, the nominal wages will rise so that aggregate supply curve shifts from The new equilibrium will be at point (a) The Price level will be with the price level at with the price level at _to _and real domestic output at so the increase in the aggregate demand has only moved the economy along its, (d) Assume that the economy is now initially at equilibrium point W, where the AD 1 intersects the AS1. If there is cost push inflation then: a. In the short run, the new equilibrium point is at point curve. the price level at and real domestic output at, Price level
Transcribed Image Text:The following is an aggregate demand and aggregate supply model. ASLA AS2 AS, P3 P2 AD2 AD1 Q, Real output Assume that the economy is initially in equilibrium at AD1 and AS1 and the real domestic output will be (b) If there is demand pull inflation, then in the short run, the new equilibrium is at point and real domestic output at, (c) In the long run, the nominal wages will rise so that aggregate supply curve shifts from The new equilibrium will be at point (a) The Price level will be with the price level at with the price level at _to _and real domestic output at so the increase in the aggregate demand has only moved the economy along its, (d) Assume that the economy is now initially at equilibrium point W, where the AD 1 intersects the AS1. If there is cost push inflation then: a. In the short run, the new equilibrium point is at point curve. the price level at and real domestic output at, Price level
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