The graph shows the economy in long-run equilibrium. Then the world economy expands and the demand for U.S.-produced goods increases. Draw a curve that shows: 1) the effect of increased demand for U.S.-produced goods. Label it 1. 2) the effect of a rising money wage rate that returns the economy to full employment. Label it 2. Draw a point at the new long-run equilibrium. An economy is in a long-run equilibrium. How does the economy return to a full-employment equilibrium following an increase in aggregate demand? An increase in aggregate demand creates rise in the money wage rate decreases returns the economy to a full-employment equilibrium. and OA. a positive; short-run aggregate supply O B. a recessionary; short-run aggregate supply OC. an inflationary; the quantity of real GDP demanded O D. an inflationary; short-run aggregate supply and long-run aggregate supply gap. A 140- 130 120- 110- 100- 90- 80+ Price level (GDP deflator, 2012=100) 18.0 (18,91.3) LAS 19.0 20.0 21.0 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question. SAS AD 22

The graph shows the economy in long-run equilibrium. Then the world economy expands and the demand for U.S.-produced goods increases. Draw a curve that shows: 1) the effect of increased demand for U.S.-produced goods. Label it 1. 2) the effect of a rising money wage rate that returns the economy to full employment. Label it 2. Draw a point at the new long-run equilibrium. An economy is in a long-run equilibrium. How does the economy return to a full-employment equilibrium following an increase in aggregate demand? An increase in aggregate demand creates rise in the money wage rate decreases returns the economy to a full-employment equilibrium. and OA. a positive; short-run aggregate supply O B. a recessionary; short-run aggregate supply OC. an inflationary; the quantity of real GDP demanded O D. an inflationary; short-run aggregate supply and long-run aggregate supply gap. A 140- 130 120- 110- 100- 90- 80+ Price level (GDP deflator, 2012=100) 18.0 (18,91.3) LAS 19.0 20.0 21.0 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question. SAS AD 22

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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