13. Using an AS/AD diagram, illustrate the effects of an aggregate supply shock. What happens in the short run to: Output? Unemployment? Price level?

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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13. Using an AS/AD diagram, illustrate the effects of an aggregate supply shock.
What happens in the short run to:
Output?
Unemployment?
Price level?
Explain how the economy returns to the long run level of output.
What happens in the long run, if the economy self adjusts, to: Output?
Unemployment?
Price level?
What policies could the government use to stabilize the economy?
How would these policies work?
What happens in the long run, if the government uses policy, to: Output?
Unemployment?
Price level?
Transcribed Image Text:13. Using an AS/AD diagram, illustrate the effects of an aggregate supply shock. What happens in the short run to: Output? Unemployment? Price level? Explain how the economy returns to the long run level of output. What happens in the long run, if the economy self adjusts, to: Output? Unemployment? Price level? What policies could the government use to stabilize the economy? How would these policies work? What happens in the long run, if the government uses policy, to: Output? Unemployment? Price level?
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