1. Aggregate demand, aggregate supply, and the Phillips Curve In the year 2023, aggregate demand and aggregate supply in the fictional country of Bartak are represented by the curves ADs and AS on the following graph. The price level is 102. The graph also shows two possible outcomes for 2024. The first potential aggregate demand curve is given by the ADA curve, resulting in the outcome illustrated by point A. The second potential aggregate demand curve is given by the ADS curve, resulting in the outcome illustrated by point B PRICE LEVEL OUTPUT (Tons of dollars) AS

1. Aggregate demand, aggregate supply, and the Phillips Curve In the year 2023, aggregate demand and aggregate supply in the fictional country of Bartak are represented by the curves ADs and AS on the following graph. The price level is 102. The graph also shows two possible outcomes for 2024. The first potential aggregate demand curve is given by the ADA curve, resulting in the outcome illustrated by point A. The second potential aggregate demand curve is given by the ADS curve, resulting in the outcome illustrated by point B PRICE LEVEL OUTPUT (Tons of dollars) AS

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

M10

1. Aggregate demand, aggregate supply, and the Phillips curve.
In the year 2023, aggregate demand and aggregate supply in the fictional country of Bartak are represented by the curves AD and AS on the
following graph. The price level is 102. The graph also shows two possible outcomes for 2024. The first potential aggregate demand curve is given by
the ADA curve, resulting in the outcome illustrated by point A. The second potential aggregate demand curve is given by the AD curve, resulting in
the outcome illustrated by point B.
PRICE LEVEL
106
105
104
101
1
AS
B
.
10 13
OUTPUT (Trillions of dollars)
AD
14
AD

Hint: Hover your cursor ever each point after you plot it to make sure you have placed it on the exact coordinate you intended.
1
UNEMPLOYMENT RATE (Paro
Outcome A
A
Outcome
Phils Curve
Suppose that the government is considering enacting an expansionary policy in 2023 that would shift aggregate demand in 2024 from ADA to AD
This would cause a
the short-run Philips curve, resulting in
in the inflation rate and
in the

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