ons, there are se Suppose that because of globally adverse meteorological extensive group of commodities. As a result, people now expect an acute increase in the level of input prices. The figure shows aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS). Move one or more of these curves to describe the short-run effect this would have in the economy and answer the two questions. Price level LRAS SRAS
ons, there are se Suppose that because of globally adverse meteorological extensive group of commodities. As a result, people now expect an acute increase in the level of input prices. The figure shows aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS). Move one or more of these curves to describe the short-run effect this would have in the economy and answer the two questions. Price level LRAS SRAS
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose that because of globally adverse meteorological conditions, there are serious concerns of climbing prices in an
extensive group of commodities. As a result, people now expect an acute increase in the level of input prices. The figure shows
aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS). Move one or more of
these curves to describe the short-run effect this would have in the economy and answer the two questions.
Price level
LRAS
SRAS
AD
Transcribed Image Text:In the short run, price level
decreases.
increases.
The change is indeterminate.
In the short run, real GDP (or aggregate output)
The change is indeterminate.
decreases.
O increases.
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