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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

If the economy is operating In the Keynesian zone of the SRAS curve and aggregate demand falls, what is likely to happen to real GDP?

To determine

Impact on real GDP if Aggregate demand curve falls and it is operating in keynesian range of SRAS curve.

Explanation

As the economy is operating in the Keynesian zone of SRAS curve, as aggregate demand falls. It will shift AD curve to its left. This will decrease real GDP and insignificant fall in price level...

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