Question 2 The Australian economy is initially in long-run equilibrium. The import price of industrial machinery, which it uses for production, now falls. In the short run: the aggregate demand curves shifts left and the short-run aggregate supply curve shifts right. the aggregate demand curve does not shift and the short-run aggregate supply curve shifts right. the aggregate demand curve shifts left and the short-run aggregate supply curve does not shift. the aggregate demand curve shifts right and the short-run aggregate supply curve does not shift. the aggregate demand curve does not shift and the short-run aggregate supply curve shifts left.

Aggregate demand depicts the inverse relationship between the price level and real GDP. Short-run…

Answered: The Australian economy is initially in…

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 2

The Australian economy is initially in long-run equilibrium. The import price of industrial machinery, which it uses for production, now falls. In the short run:

		the aggregate demand curves shifts left and the short-run aggregate supply curve shifts right.
		the aggregate demand curve does not shift and the short-run aggregate supply curve shifts right.
		the aggregate demand curve shifts left and the short-run aggregate supply curve does not shift.
		the aggregate demand curve shifts right and the short-run aggregate supply curve does not shift.
		the aggregate demand curve does not shift and the short-run aggregate supply curve shifts left.

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