Price level LRAS (GDP deflator, 2000 - 100) SRAS Real GDP (trillions of 2000 dollars) In the figure above, what do the classical/neoclassical economists suggest in terms of achieving full employment in the Long Run?
Price level LRAS (GDP deflator, 2000 - 100) SRAS Real GDP (trillions of 2000 dollars) In the figure above, what do the classical/neoclassical economists suggest in terms of achieving full employment in the Long Run?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Price level
LRAS
(GDP deflator,
2000 - 100)
SRAS
AD
Real GDP
(trillions of 2000 dollars)
In the figure above, what do the classical/neoclassical economists suggest in terms of achieving full
employment in the Long Run?
O No action is needed, wages will go down and shift AS to the left
O No action is needed, wages will go up and shift AS to the left
O Use fiscal policy
O Use monetary policy
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