price level LRAS SRAS1 SRAS2 Refer to the above Figure. If the economy is AD1 AD2 quantity of output at A and there is a stock market crash, in the short run the economy 1) stays at A. 2) moves to B. 3) moves to C. 4) moves to D.
price level LRAS SRAS1 SRAS2 Refer to the above Figure. If the economy is AD1 AD2 quantity of output at A and there is a stock market crash, in the short run the economy 1) stays at A. 2) moves to B. 3) moves to C. 4) moves to D.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter8: Aggregate Demand And Aggregate Supply
Section8.5: Long Run Aggregate Supply
Problem 2ST
Related questions
Question
![price
level
LRAS
SRAS1
SRAS2
D
Refer to the above Figure. If the economy is
AD1
AD2
quantity of output
at A and there is a stock market crash, in the short run the economy
1) stays at A.
2)
moves to B.
3)
moves to C.
4) moves to D.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ea3a059-0a8a-4779-bed8-ef5706e6b286%2Fe4badf19-9e2f-4de0-b64c-a94e64328857%2F6436x0q_processed.jpeg&w=3840&q=75)
Transcribed Image Text:price
level
LRAS
SRAS1
SRAS2
D
Refer to the above Figure. If the economy is
AD1
AD2
quantity of output
at A and there is a stock market crash, in the short run the economy
1) stays at A.
2)
moves to B.
3)
moves to C.
4) moves to D.
![Pessimism (suggestion: draw the AS-AD diagram to help your analysis and start with the long-run and short-run
equilibrium, i.e. the intersection of LRAS, SRAS and AD curves)
Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international
tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and
retain that level of pessimism for some time.
Refer to Pessimism. Which curve shifts and in which direction?
1)
aggregate demand shifts right
2)
aggregate demand shifts left
3)
aggregate supply shifts right.
4)
aggregate supply shifts left.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ea3a059-0a8a-4779-bed8-ef5706e6b286%2Fe4badf19-9e2f-4de0-b64c-a94e64328857%2Fzwiuuob_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Pessimism (suggestion: draw the AS-AD diagram to help your analysis and start with the long-run and short-run
equilibrium, i.e. the intersection of LRAS, SRAS and AD curves)
Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international
tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and
retain that level of pessimism for some time.
Refer to Pessimism. Which curve shifts and in which direction?
1)
aggregate demand shifts right
2)
aggregate demand shifts left
3)
aggregate supply shifts right.
4)
aggregate supply shifts left.
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