Now show the long-run impact of the sharp increase in saving by shifting both the aggregate demand (AD) curve and the short-run aggregate supply(AS) curve to the appropriate positions.240AS200AD160AS12080AD40100200300400500600OUTPUT (Billions of dollars)In the long run, as a result of the sharp increase in saving, the price level, the quantity of outputthe naturallevel of output, and the unemployment ratethe natural rate of unemployment.Grade It NowSave & ContinueContinue without savingPRICE LEVEL

At a given price and particular time, overall demand is defined as cumulative sum of money…

Answered: In the long run, as a result of the…

In the long run, as a result of the sharp increase in saving, the price level , the quantity of output the natural level of output, and the unemployment rate the natural rate of unemployment.

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter9: An Introduction To Basic Macroeconomic Markets

Section: Chapter Questions

Problem 3CQ

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Question

Now show the long-run impact of the sharp increase in saving by shifting both the aggregate demand (AD) curve and the short-run aggregate supply
(AS) curve to the appropriate positions.
240
AS
200
AD
160
AS
120
80
AD
40
100
200
300
400
500
600
OUTPUT (Billions of dollars)
In the long run, as a result of the sharp increase in saving, the price level
, the quantity of output
the natural
level of output, and the unemployment rate
the natural rate of unemployment.
Grade It Now
Save & Continue
Continue without saving
PRICE LEVEL

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A5