Price level LRAS AS1 Figure 12.8 B A ASO AS₂ AD₁ ADO E Y₂ Yo Y₁ Aggregate output ($ billion) AD₂ Refer to Figure 12.8. This economy cannot continue to produce Y₁ (or at point B) because O the price of raw material will increase, shifting the aggregate demand curve to AD2. O all of the above O the price of raw material and wages will increase shifting the aggregate supply curve to AS₁. O the price of inputs will decrease, shifting the aggregate supply curve to AS2.
Price level LRAS AS1 Figure 12.8 B A ASO AS₂ AD₁ ADO E Y₂ Yo Y₁ Aggregate output ($ billion) AD₂ Refer to Figure 12.8. This economy cannot continue to produce Y₁ (or at point B) because O the price of raw material will increase, shifting the aggregate demand curve to AD2. O all of the above O the price of raw material and wages will increase shifting the aggregate supply curve to AS₁. O the price of inputs will decrease, shifting the aggregate supply curve to AS2.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Price level
LRAS AS1
Figure 12.8
C
B
A
ASO
AS₂
AD₁
ADO
E
Y2 Yo Y₁
Aggregate output ($ billion)
AD₂
Refer to Figure 12.8. This economy cannot continue to produce Y₁ (or at
point B) because
O the price of raw material will increase, shifting the aggregate demand curve to
AD2.
O all of the above
O the price of raw material and wages will increase shifting the aggregate supply
curve to AS₁.
O the price of inputs will decrease, shifting the aggregate supply curve to AS2.
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