The graph shows the economy in long-run equilibrium at point A. LRAS, SRAS, Now assume that there is a large increase in demand for U.S. exports. 1.) Use the line drawing tool to show the resulting short-run equilibrium on your diagram. Label any new aggregate demand or aggregate supply curve as AD2, SRAS, or LRAS, as appropriate. 2.) Use the point drawing tool to locate the new short- run equilibrium point. Label this point B. Now consider the adjustment of the economy back to long-run equilibrium. 3.) Use the line drawing tool to show the resulting long-run equilibrium on your diagram. Label any new aggregate demand or aggregate supply curve appropriately. 4.) Use the point drawing tool to locate the new long- run equilibrium point. Label this point C. Carefully follow the instructions above, and only draw the required objects. AD, Real GDP (trillions of 2012 dollars) Price level (GDP Deflator, 2012 = 100)
The graph shows the economy in long-run equilibrium at point A. LRAS, SRAS, Now assume that there is a large increase in demand for U.S. exports. 1.) Use the line drawing tool to show the resulting short-run equilibrium on your diagram. Label any new aggregate demand or aggregate supply curve as AD2, SRAS, or LRAS, as appropriate. 2.) Use the point drawing tool to locate the new short- run equilibrium point. Label this point B. Now consider the adjustment of the economy back to long-run equilibrium. 3.) Use the line drawing tool to show the resulting long-run equilibrium on your diagram. Label any new aggregate demand or aggregate supply curve appropriately. 4.) Use the point drawing tool to locate the new long- run equilibrium point. Label this point C. Carefully follow the instructions above, and only draw the required objects. AD, Real GDP (trillions of 2012 dollars) Price level (GDP Deflator, 2012 = 100)
Chapter14: Aggregate Demand And Supply
Section14.A: The Self Correcting Aggregate Demand And Supply Model
Problem 1SQP
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Transcribed Image Text:End of Chapter 3.5a
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The graph shows the economy in long-run equilibrium at point A.
LRAS,
SRAS,
Now assume that there is a large increase in demand for U.S. exports.
1.) Use the line drawing tool to show the resulting short-run equilibrium on your diagram. Label
any new aggregate demand or aggregate supply curve as AD2, SRAS, or LRAS, as
appropriate.
2.) Use the point drawing tool to locate the new short- run equilibrium point. Label this point B.
Now consider the adjustment of the economy back to long-run equilibrium.
3.) Use the line drawing tool to show the resulting long-run equilibrium on your diagram. Label
any new aggregate demand or aggregate supply curve appropriately.
4.) Use the point drawing tool to locate the new long- run equilibrium point. Label this point C.
Carefully follow the instructions above, and only draw the required objects.
AD1
Real GDP (trillions of 2012 dollars)
Click the graph, choose a tool in the palette and follow the instructions to create your graph.
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Price level (GDP Deflator, 2012 = 100)
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