Aggregate Price Level (P) ADO Long-Run Macro Equilibrium LRAS SRAS in both directions Shift the AD curve Aggregate Output (Q) desmos வ Show Transcribed Text Adjust the interactive graph in order to observe the economy in both short-run and long-run equilibrium. Use what is observed in order to answer the questions that follow. On a temporary timeframe, the economy can expand past full employment. a. In order to produce this higher level of output when the economy is already producing at potential GDP, what must businesses do? pay workers overtime pay higher wages in order to entice employed workers to leave their current firms run machines longer, which increases maintenance costs reduce worker wages Show Transcribed Text C b. What is an important distinction of this rightward shift in AD, when compared to the same shift when short-run equilibrium is below full employment? An increase in aggregate demand when above full employment causes a(n) compared to the equivalent shift that occurs when the short-run equilibrium is increase in the price level potential GDP

Aggregate Price Level (P) ADO Long-Run Macro Equilibrium LRAS SRAS in both directions Shift the AD curve Aggregate Output (Q) desmos வ Show Transcribed Text Adjust the interactive graph in order to observe the economy in both short-run and long-run equilibrium. Use what is observed in order to answer the questions that follow. On a temporary timeframe, the economy can expand past full employment. a. In order to produce this higher level of output when the economy is already producing at potential GDP, what must businesses do? pay workers overtime pay higher wages in order to entice employed workers to leave their current firms run machines longer, which increases maintenance costs reduce worker wages Show Transcribed Text C b. What is an important distinction of this rightward shift in AD, when compared to the same shift when short-run equilibrium is below full employment? An increase in aggregate demand when above full employment causes a(n) compared to the equivalent shift that occurs when the short-run equilibrium is increase in the price level potential GDP

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 6SCQ: Suppose concerns about the size of the federal budget deficit lead the U.S. Congress to cut all...

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Question

Aggregate Price Level (P)
Aggregate Output (Q)
ADO
desmos
Long-Run Macro Equilibrium
LRAS
SRAS
in both directions
Shift the AD curve
Show Transcribed Text
Adjust the interactive graph in order to observe the economy in both short-run and long-run equilibrium. Use what is
observed in order to answer the questions that follow.
On a temporary timeframe, the economy can expand past full employment.
a. In order to produce this higher level of output when the economy is already producing at potential GDP, what must
businesses do?
pay workers overtime
pay higher wages in order to entice employed workers to leave their current firms
run machines longer, which increases maintenance costs
reduce worker wages
Show Transcribed Text
b. What is an important distinction of this rightward shift in AD, when compared to the same shift when short-run
equilibrium is below full employment?
An increase in aggregate demand when above full employment causes a(n)
compared to the equivalent shift that occurs when the short-run equilibrium is
increase in the price level
potential GDP.

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