The graph below shows an economy in long-run equilibrium. According to real business-cycle theory, show what would happen if a major technological innovation boosted the overall productivity in the economy significantly a. Use the AD-AS graph below to demonstrate the long-run equilibrium that would occur after this change. Instructions: Use the tools provided AD2' and 'ASLR2' to plot each curve to demonstrate the new long-run equilibrium if GDP changes by $10 billion. Plot only the endpoints of each line.

The graph below shows an economy in long-run equilibrium. According to real business-cycle theory, show what would happen if a major technological innovation boosted the overall productivity in the economy significantly a. Use the AD-AS graph below to demonstrate the long-run equilibrium that would occur after this change. Instructions: Use the tools provided AD2' and 'ASLR2' to plot each curve to demonstrate the new long-run equilibrium if GDP changes by $10 billion. Plot only the endpoints of each line.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Production And Growth

Section: Chapter Questions

Problem 5CQQ

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