Price Level PPR P₁ P₂ SRAS AD₂ SRAS₂ ADI Y₂ Y Goods and Services Market Refer to Figure 14-5. AD₁ and SRAS, indicate an economy initially operating at full-employment output level, Y₁. The long-run impact of the Fed unexpectedly shifting to a more restrictive monetary policy will be O a decrease in aggregate demand to AD2 and a decrease in real output to Y₂. O a decrease in aggregate demand to AD2 and an increase in short-run aggregate supply to SRAS2, causing the price level to fall to P3 and real output to remain unchanged at Y₁- O no change; AD and SRAS will stay at AD₁ and SRAS₁. O a decrease in the full-employment level of output to Y2-

Price Level PPR P₁ P₂ SRAS AD₂ SRAS₂ ADI Y₂ Y Goods and Services Market Refer to Figure 14-5. AD₁ and SRAS, indicate an economy initially operating at full-employment output level, Y₁. The long-run impact of the Fed unexpectedly shifting to a more restrictive monetary policy will be O a decrease in aggregate demand to AD2 and a decrease in real output to Y₂. O a decrease in aggregate demand to AD2 and an increase in short-run aggregate supply to SRAS2, causing the price level to fall to P3 and real output to remain unchanged at Y₁- O no change; AD and SRAS will stay at AD₁ and SRAS₁. O a decrease in the full-employment level of output to Y2-

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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