Price level (GDP price level, 2005 = 100) 116- 112- Potential GDP AS 108- 104 100- 96- 92- 88- AD 84- 80- 530 540 550 560 Real GDP (trillions of 2005 yen) 570 580 >>> Draw only the objects specified in the questiorn The graph shows the Japanese economy at the beginning of 2010 Draw an aggregate demand curve that is consistent with a falling unemployment rate Label it AD, Draw an aggregate supply curve that corresponds to the price level falling and the economy still remaining in a recessionary gap Draw a point at the new macroeconomic equilibrium Click to enlarge graph The economic recovery will occur and deflation will ease if OA aggregate demand increase faster than aggregate supply increases OB. aggregate supply increases faster than aggregate demand increases OC. aggregate supply decreases with no change in aggregate demand O D. aggregate demand decreases with no change on aggregate supply

Price level (GDP price level, 2005 = 100) 116- 112- Potential GDP AS 108- 104 100- 96- 92- 88- AD 84- 80- 530 540 550 560 Real GDP (trillions of 2005 yen) 570 580 >>> Draw only the objects specified in the questiorn The graph shows the Japanese economy at the beginning of 2010 Draw an aggregate demand curve that is consistent with a falling unemployment rate Label it AD, Draw an aggregate supply curve that corresponds to the price level falling and the economy still remaining in a recessionary gap Draw a point at the new macroeconomic equilibrium Click to enlarge graph The economic recovery will occur and deflation will ease if OA aggregate demand increase faster than aggregate supply increases OB. aggregate supply increases faster than aggregate demand increases OC. aggregate supply decreases with no change in aggregate demand O D. aggregate demand decreases with no change on aggregate supply

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 1QR

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Question

Price level (GDP price level, 2005 = 100)
116-
Potential GDP
112-
AS
108-
104-
100-
96-
92-
88-
AD
84-
80+
530
540
550
560
Real GDP (trillions of 2005 yen)
570
580
>>> Draw only the objects specified in the question.
The graph shows the Japanese economy at the beginning of 2010
Draw an aggregate demand curve that is consistent with a falling unemployment rate. Label it AD,
Draw an aggregate supply curve that corresponds to the price level falling and the economy still remaining in a recessionary
gap
Draw a point at the new macroeconomic equilibrium.
Click to
enlarge
graph
The economic recovery will occur and deflation will ease if
O A. aggregate demand increase faster than aggregate supply increases
OB. aggregate supply increases faster than aggregate demand increases
OC. aggregate supply decreases with no change in aggregate demand
O D. aggregate demand decreases with no change on aggregate supply

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