Refer to Figure 16-1. Suppose the economy is in short-run equilibrium below potential GDP and no fiscal or monetary policy is pursued. Using the basic AD-AS model in the figure above, this would be depicted as a movement from OC to B. O A to E. OB to A. OB to C. A to B.

Refer to Figure 16-1. Suppose the economy is in short-run equilibrium below potential GDP and no fiscal or monetary policy is pursued. Using the basic AD-AS model in the figure above, this would be depicted as a movement from OC to B. O A to E. OB to A. OB to C. A to B.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Figure 16-1
Price level
LRAS
X
D
B.
3
L
SRAS
AD3
AD₂
AD₁
Real GDP
Refer to Figure 16-1. Suppose the economy is in short-run equilibrium below potential GDP and
no fiscal or monetary policy is pursued. Using the basic AD-AS model in the figure above, this
would be depicted as a movement from
O C to B.
A to E.
B to A.
B to C.
A to B.

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