In the graph below, the equilibrium price level and the equilibrium real GDP are found where the two curves If the actual price level exceeds the equilibrium price level, then it is the case that AD production potential (LRAS). If the actual price level is below the equilibrium price level, then it is the case that (AD) production potential (LRAS). LRAS, Price Level Real GDP ($ trillions per year) AD₁ 13 " the economy's the economy's
In the graph below, the equilibrium price level and the equilibrium real GDP are found where the two curves If the actual price level exceeds the equilibrium price level, then it is the case that AD production potential (LRAS). If the actual price level is below the equilibrium price level, then it is the case that (AD) production potential (LRAS). LRAS, Price Level Real GDP ($ trillions per year) AD₁ 13 " the economy's the economy's
Chapter11: Managing Aggregate Demand: Fiscal Policy
Section: Chapter Questions
Problem 2TY
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