Suppose that the economy is initially in long-run equilibrium with the price level of 800.Now suppose that the Aggregate Demand (AD) curve shifts left from AD1 (blue) to AD2 (green).Price Level1200+11001000ADX900-800AD700-SRASI600*500400300200100LRAS200 300 400 500 600 700 800 900Real GDPWhat is GDP in the new long-run equilibrium as a result of this shift?1001000 1100 120

The economy was initially performing at the price level of $800 and a real GDP of 200 units. It is…

Suppose that the economy is initially in long-run equilibrium with the price level of 800. Now suppose that the Aggregate Demand (AD) curve shifts left from AD1 (blue) to AD2 (green). 1200- 1100- 1000 Price Level ADX 900- 800* ADX 700 SRASI 600 500 400- 300- 200 100 LRAS 200 300 400 500 600 700 800 900 Real GDP What is GDP in the new long-run equilibrium as a result of this shift? 100 1000 1100 120 a

Suppose that the economy is initially in long-run equilibrium with the price level of 800. Now suppose that the Aggregate Demand (AD) curve shifts left from AD1 (blue) to AD2 (green). 1200- 1100- 1000 Price Level ADX 900- 800* ADX 700 SRASI 600 500 400- 300- 200 100 LRAS 200 300 400 500 600 700 800 900 Real GDP What is GDP in the new long-run equilibrium as a result of this shift? 100 1000 1100 120 a

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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MC Qu. 67 Refer to the graph shown. A.... Refer to the graph shown. Output Time A trough will be arrived at when the economy moves from point OB to point C A to point B C to point D OB to point D
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Price Level Question 38 The graph below shows the AD-AS diagram for Norway. Suppose that the economy is initially in long-run equilibrium with the price level of 900 (Red AD and SRAS curves). Now suppose that consumers become optimistic. 1200* 1100- 1000 900 800* 700- 600- 500 400- 300- 200 100 > 100 200 300 400 500 600 700 800 900 1000 1100 120 Real GDP Q 1. As a result of this event what is the new short-run price level? 2. As a result of this event, what is the new short-run GDP? 3. As a result of this event, what is the new long-run price level? 4. As a result of this event, what is the new long-run GDP? Submit Question