Figure 8.3 Price Level Long run Aggregate Supply B A AS AS2 AD1 AD2 A Quantity of Output Long run Aggregate Supply = Potential GDP Refer to Figure 8.3 above. If the economy is at point A, then a decrease in the money wage rate will change/shift AD1 to AD2 O change/shift AD2 to AD1 O change/shift AS1 to AS2 O change/shift AS2 to AS1

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter8: Macroeconomic Equilibrium: Aggregate Demand And Supply
Section: Chapter Questions
Problem 20E
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Figure 8.3
Price Level
Long run
Aggregate
Supply
B
A
AS
AS2
AD1
AD2
A
Quantity of Output
Long run Aggregate Supply = Potential GDP
Refer to Figure 8.3 above. If the economy is at point A, then a decrease in the money wage rate will
change/shift AD1 to AD2
O change/shift AD2 to AD1
O change/shift AS1 to AS2
O change/shift AS2 to AS1
Transcribed Image Text:Figure 8.3 Price Level Long run Aggregate Supply B A AS AS2 AD1 AD2 A Quantity of Output Long run Aggregate Supply = Potential GDP Refer to Figure 8.3 above. If the economy is at point A, then a decrease in the money wage rate will change/shift AD1 to AD2 O change/shift AD2 to AD1 O change/shift AS1 to AS2 O change/shift AS2 to AS1
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