Assume that the economy begins in short-run equilibrium as shown in the graph below. Graph the effect on the equilibrium price level (PL) and real GDP (Y) if there is a decrease in aggregate demand (AD). Label the equilibrium price level and real GDP after the decrease in aggregate demand as PL2 and Y2.

Assume that the economy begins in short-run equilibrium as shown in the graph below. Graph the effect on the equilibrium price level (PL) and real GDP (Y) if there is a decrease in aggregate demand (AD). Label the equilibrium price level and real GDP after the decrease in aggregate demand as PL2 and Y2.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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