Suppose there is a major global shortage of microchips, a key input for many industries. Using the aggregate demand-aggregate supply model, what impact will this have on the economy? a) This will shift aggregate demand left, which will cause output to fall and the price level to fall. b) This will shift aggregate demand right, which will cause output to rise and the price level to rise. c) This will shift short-run aggregate supply left, which will cause output to fall and the price level to rise. d) This will shift short-run aggregate supply right, which will cause output to rise and the price level to fall.
Suppose there is a major global shortage of microchips, a key input for many industries. Using the aggregate demand-aggregate supply model, what impact will this have on the economy? a) This will shift aggregate demand left, which will cause output to fall and the price level to fall. b) This will shift aggregate demand right, which will cause output to rise and the price level to rise. c) This will shift short-run aggregate supply left, which will cause output to fall and the price level to rise. d) This will shift short-run aggregate supply right, which will cause output to rise and the price level to fall.
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter10: Dynamic Change, Economic Fluctuations, And The Ad-as Model
Section: Chapter Questions
Problem 3CQ
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Suppose there is a major global shortage of microchips, a key input for many industries. Using the aggregate demand-aggregate supply model, what impact will this have on the economy?
a) This will shift aggregate demand left, which will cause output to fall and the price level to fall.
b) This will shift aggregate demand right, which will cause output to rise and the price level to rise.
c) This will shift short-run aggregate supply left, which will cause output to fall and the price level to rise.
d) This will shift short-run aggregate supply right, which will cause output to rise and the price level to fall.
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