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Explain in 3. Long- and short-run aggregate supply curves Draw a set of axes like those in Figure 10-4, but do not draw the supply curves shown there. Instead, draw a long-run aggregate supply curve based on the assumption that the natural level of real output is $3,000 billion. What is the slope of the curve? At what point does it intersect the horizontal axis? Next, draw a short-run aggregate supply curve based on the assumption that the expected level of input prices is 1.5. Where does this short-run aggregate supply curve intersect the long-run aggregate supply curve that you drew?

Explain in 3. Long- and short-run aggregate supply curves Draw a set of axes like those in Figure 10-4, but do not draw the supply curves shown there. Instead, draw a long-run aggregate supply curve based on the assumption that the natural level of real output is $3,000 billion. What is the slope of the curve? At what point does it intersect the horizontal axis? Next, draw a short-run aggregate supply curve based on the assumption that the expected level of input prices is 1.5. Where does this short-run aggregate supply curve intersect the long-run aggregate supply curve that you drew?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Explain in 3. Long- and short-run aggregate supply curves Draw a set of axes like those in Figure 10-4, but do not draw the supply curves shown there. Instead, draw a long-run aggregate supply curve based on the assumption that the natural level of real output is $3,000 billion. What is the slope of the curve? At what point does it intersect the horizontal axis? Next, draw a short-run aggregate supply curve based on the assumption that the expected level of input prices is 1.5. Where does this short-run aggregate supply curve intersect the long-run aggregate supply curve that you drew?
Transcribed Image Text:Explain in 3. Long- and short-run aggregate supply curves Draw a set of axes like those in Figure 10-4, but do not draw the supply curves shown there. Instead, draw a long-run aggregate supply curve based on the assumption that the natural level of real output is $3,000 billion. What is the slope of the curve? At what point does it intersect the horizontal axis? Next, draw a short-run aggregate supply curve based on the assumption that the expected level of input prices is 1.5. Where does this short-run aggregate supply curve intersect the long-run aggregate supply curve that you drew?
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