The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A. Y* AS 100 80 E 60 AD 650 700 800 1000 Real GDP Refer to the figure above. In the initial short-run equilibrium, there is but this gap could be closed by a output gap of a recessionary; 200; fiscal expansion. a recessionary; 100; fiscal contraction. an inflationary; 100; fiscal contraction a recessionary; 200; fiscal contraction Price Level B.

The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A. Y* AS 100 80 E 60 AD 650 700 800 1000 Real GDP Refer to the figure above. In the initial short-run equilibrium, there is but this gap could be closed by a output gap of a recessionary; 200; fiscal expansion. a recessionary; 100; fiscal contraction. an inflationary; 100; fiscal contraction a recessionary; 200; fiscal contraction Price Level B.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 10SCQ: Many financial analysts and economists eagerly await the press releases for the reports on the home...

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Many financial analysts and economists eagerly await the press releases for the reports on the home price index and consumer confidence index. What would be the effects of a negative report on both of these? What about a positive report?
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