Suppose that an economy that is initially in equilibrium sees an increase in investment spending. Explain the impact that this will have on the aggregate supply curve and/or the aggregate demand curve. What will be the ultimate impact on both the price level and real GDP, and why?
Suppose that an economy that is initially in equilibrium sees an increase in investment spending. Explain the impact that this will have on the aggregate supply curve and/or the aggregate demand curve. What will be the ultimate impact on both the price level and real GDP, and why?
Chapter8: Macroeconomic Equilibrium: Aggregate Demand And Supply
Section: Chapter Questions
Problem 11E
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