4 Question 1:a.b.C.Price level (GDP deflator, 1996-100)LAS120EX1101308 81009009.0SASAD9.5 10.0 10.5 11.0 11.5Real GDP fritions of 1996 dollar)Does the country in the above graph have an unemployment or an inflationproblem?What fiscal policy action would you advise the government to take to fix theproblem in (a)?If the government listens to your advice, what will be the effect of that policyaction on aggregate demand and supply curves? How will the real GDP and pricesrespond to the policy change?

Introduction This is the situation of long run macroeconomic equilibrium. It will occur at the price…

a. problem? Price level (GDP deflator, 1996-100) LAS 120 EX 110 100 130 8 0 SAS 9.0 9.5 10.0 10.5 11.0 11.5 Reel GOP (ritions of 1996 dollars) Does the country in the above graph have an unemployment or an inflation AD

a. problem? Price level (GDP deflator, 1996-100) LAS 120 EX 110 100 130 8 0 SAS 9.0 9.5 10.0 10.5 11.0 11.5 Reel GOP (ritions of 1996 dollars) Does the country in the above graph have an unemployment or an inflation AD

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter13: Measuring The Economy's Performance

Section13.1: National Income Accounting

Problem 5R

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