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Economy in the Short Run Economy in the Long Run LRAS LRAS SRAS SRAS E LR AD AD Real GDP Real GDP In the short run, the price level and In the long run, the price level and real GDP real GDP Aggregate price level Aggregate price level

Economy in the Short Run Economy in the Long Run LRAS LRAS SRAS SRAS E LR AD AD Real GDP Real GDP In the short run, the price level and In the long run, the price level and real GDP real GDP Aggregate price level Aggregate price level

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The accompanying graphs illustrate an initial equilibrium for the economy. Suppose that oil prices increase temporarily. Use the graphs to show the new positions of aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS) in both the short-run and the long-run, as well as the short-run (EsR) and long-run (ELR) equilibria resulting from this change. Then answer what happens to the price level and GDP. Economy in the Short Run Economy in the Long Run LRAS LRAS SRAS SRAS SR E LR AD AD Real GDP Real GDP Aggregate price level Aggregate price level
Transcribed Image Text:The accompanying graphs illustrate an initial equilibrium for the economy. Suppose that oil prices increase temporarily. Use the graphs to show the new positions of aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS) in both the short-run and the long-run, as well as the short-run (EsR) and long-run (ELR) equilibria resulting from this change. Then answer what happens to the price level and GDP. Economy in the Short Run Economy in the Long Run LRAS LRAS SRAS SRAS SR E LR AD AD Real GDP Real GDP Aggregate price level Aggregate price level
Economy in the Short Run Economy in the Long Run LRAS LRAS SRAS SRAS SR E "LR AD AD Real GDP Real GDP In the short run, the price level and In the long run, the price level and real GDP real GDP Aggregate price level Aggregate price level
Transcribed Image Text:Economy in the Short Run Economy in the Long Run LRAS LRAS SRAS SRAS SR E "LR AD AD Real GDP Real GDP In the short run, the price level and In the long run, the price level and real GDP real GDP Aggregate price level Aggregate price level
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