The figure to the right shows the result of an increase in aggregate demandfrom AD to AD₁.In its new short run equilibrium the economy is restingits potential output.Because the economy is producing beyond its potential output level, inputprices and hence production costs are being pushed upward.Using either the line drawing tool or the 3-point curved line drawing tool,illustrate the impact of rising production costs. Properly label your new line orcurve.Note: Carefully follow the instructions above and only draw the requiredobject.According to your figure, the eventual long-run impact of the increase inaggregate demand isO A. higher prices, lower output.OB. higher prices, higher output.OC. higher prices, unchanged output.O D. higher output, unchanged prices.Price level, PAS (Long run)ASO (Short run)Yo Y₁Aggregate output (income), YAD₁ADO

Aggregate demand curve represents quantity demanded corresponding to different price level.…

According to your figure, the eventual long-run impact of the increase in aggregate demand is A. higher prices, lower output. B. higher prices, higher output. C. higher prices, unchanged output. D. higher output, unchanged prices.

According to your figure, the eventual long-run impact of the increase in aggregate demand is A. higher prices, lower output. B. higher prices, higher output. C. higher prices, unchanged output. D. higher output, unchanged prices.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The figure to the right shows the result of an increase in aggregate demand
from AD to AD₁.In its new short run equilibrium the economy is resting
its potential output.
Because the economy is producing beyond its potential output level, input
prices and hence production costs are being pushed upward.
Using either the line drawing tool or the 3-point curved line drawing tool,
illustrate the impact of rising production costs. Properly label your new line or
curve.
Note: Carefully follow the instructions above and only draw the required
object.
According to your figure, the eventual long-run impact of the increase in
aggregate demand is
O A. higher prices, lower output.
OB. higher prices, higher output.
OC. higher prices, unchanged output.
O D. higher output, unchanged prices.
Price level, P
AS (Long run)
ASO (Short run)
Yo Y₁
Aggregate output (income), Y
AD₁
ADO

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Dear expert bro hand written not allowed.
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