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O A. a temporary decrease in Y, though decreasing prices push output back to Yn at the lower price level (point A). OB. a stable equilibrium (at point X) that may last for years. O C. a permanent decrease in Y, although at somewhat lower prices (point B). O D. a temporary decrease in Y, with the economy returning soon to its original point (point C).

O A. a temporary decrease in Y, though decreasing prices push output back to Yn at the lower price level (point A). OB. a stable equilibrium (at point X) that may last for years. O C. a permanent decrease in Y, although at somewhat lower prices (point B). O D. a temporary decrease in Y, with the economy returning soon to its original point (point C).

Economics:
Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter9: Aggregate Expenditures
Section: Chapter Questions
Problem 8E
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Please see attached image. A decrease in aggregate demand that pushes Y below its natural level (Yn) to point X results in LRAS Price LAVAL X B C A AD2 AD1 Y
Transcribed Image Text:Please see attached image. A decrease in aggregate demand that pushes Y below its natural level (Yn) to point X results in LRAS Price LAVAL X B C A AD2 AD1 Y
A. a temporary decrease in Y, though decreasing prices push output back to Yn at the lower price level (point A). B. a stable equilibrium (at point X) that may last for years. C. a permanent decrease in Y, although at somewhat lower prices (point B). D. a temporary decrease in Y, with the economy returning soon to its original point (point C).
Transcribed Image Text:A. a temporary decrease in Y, though decreasing prices push output back to Yn at the lower price level (point A). B. a stable equilibrium (at point X) that may last for years. C. a permanent decrease in Y, although at somewhat lower prices (point B). D. a temporary decrease in Y, with the economy returning soon to its original point (point C).
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