The graph below shows the AD-AS diagram for Brazil. Suppose that the economy is initially in long-run equilibrium with the price level of 800 (Red AD and SRAS curves). Now suppose that the federal government decreases spending. 1200t ASI AS2 1100 1000 900 800 700 600 500 400 S 300- 200 100 AD2 400 S00 60 700 к00 900 1000 1100 120 AD1 100 2al GDP Price Level
The graph below shows the AD-AS diagram for Brazil. Suppose that the economy is initially in long-run equilibrium with the price level of 800 (Red AD and SRAS curves). Now suppose that the federal government decreases spending. 1200t ASI AS2 1100 1000 900 800 700 600 500 400 S 300- 200 100 AD2 400 S00 60 700 к00 900 1000 1100 120 AD1 100 2al GDP Price Level
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 28RQ: Will the shift of SRAS to the right tend to make the equilibrium quantity and price level higher or...
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What is the new short-run price level?
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