To answer some parts of this question, you may need to refer to the diagram displayed below. The economy begins at the long-run equilibrium at point A, where Yo is the economy's potential GDP. LRAS P AS2 ASo AS1 B E F Po H AD1 ADo AD2 Y Yo Suppose the price of oil decreases in the Canadian economy. Ignore the fact that Canada is a net exporter of oil. will [ Select ] If the price level in the AD curve In response to this shock, the goods and services in the economy. economy doesn't adjust (remains at price Po), the v [ Select ] the price level must For the economy to return to equilibrium at poin A [ Select ] Hint: you can rel et equilibrium from microeconomics. E At the equilibrium point, the economy is experier C G
To answer some parts of this question, you may need to refer to the diagram displayed below. The economy begins at the long-run equilibrium at point A, where Yo is the economy's potential GDP. LRAS P AS2 ASo AS1 B E F Po H AD1 ADo AD2 Y Yo Suppose the price of oil decreases in the Canadian economy. Ignore the fact that Canada is a net exporter of oil. will [ Select ] If the price level in the AD curve In response to this shock, the goods and services in the economy. economy doesn't adjust (remains at price Po), the v [ Select ] the price level must For the economy to return to equilibrium at poin A [ Select ] Hint: you can rel et equilibrium from microeconomics. E At the equilibrium point, the economy is experier C G
Chapter11: Managing Aggregate Demand: Fiscal Policy
Section: Chapter Questions
Problem 2TY
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