The U.S. macroeconomy is in a short-run equilibrium at Q1 and P1. What is going to happen in thelong-run?PР1QNQ₁SRAS1ADQThis is a diagram with price on the vertical axis and quantity on the horizontal axis. There is a placemarked on the horizontal axis with a QN. There is an upward sloping line labelled SRAS and adownward sloping line labelled AD. The place these two lines intersect is labelled Q1 on thehorizontal axis and P1 on the vertical axis. Q1 is to the right of QN.O The aggregate demand curve will shift left leading to falling prices and falling output.O SRAS curve will shift left leading to rising output and rising prices.OSRAS curve will shift left leading to rising prices and falling output.

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long-run? P SRAS1 going

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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A: Answer to the question is as follows:

Question

The U.S. macroeconomy is in a short-run equilibrium at Q1 and P1. What is going to happen in the
long-run?
P
Р1
QN
Q₁
SRAS1
AD
Q
This is a diagram with price on the vertical axis and quantity on the horizontal axis. There is a place
marked on the horizontal axis with a QN. There is an upward sloping line labelled SRAS and a
downward sloping line labelled AD. The place these two lines intersect is labelled Q1 on the
horizontal axis and P1 on the vertical axis. Q1 is to the right of QN.
O The aggregate demand curve will shift left leading to falling prices and falling output.
O SRAS curve will shift left leading to rising output and rising prices.
OSRAS curve will shift left leading to rising prices and falling output.

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