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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F62c4ea20-982d-4098-b97a-f2367b3db2b0%2Fe8101a6e-2ecf-4489-bb45-b39fe998ee70%2F1f97ngi_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education