The graph to the right shows a 45°-line (Keynesian cross) diagram. The economy is currently in macroeconomic equilibrium at output level Y.. Suppose that the price level decreases. 1) Use the line tool to show a possible position for the new aggregate expenditures line. Label this line AE₂. Note: if you are not prompted for a label, you have used the wrong drawing tool. 2) Use the point drawing tool to show the new equilibrium levels of GDP and expenditures.Label this point 'B'. A Y = AE AEO

The graph to the right shows a 45°-line (Keynesian cross) diagram. The economy is currently in macroeconomic equilibrium at output level Y.. Suppose that the price level decreases. 1) Use the line tool to show a possible position for the new aggregate expenditures line. Label this line AE₂. Note: if you are not prompted for a label, you have used the wrong drawing tool. 2) Use the point drawing tool to show the new equilibrium levels of GDP and expenditures.Label this point 'B'. A Y = AE AEO

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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Question

CS 19

Subject _. Economics

The graph to the right shows a 45°-line (Keynesian cross) diagram. The economy is currently in
macroeconomic equilibrium at output level Y..
Suppose that the price level decreases.
1) Use the line tool to show a possible position for the new aggregate expenditures line. Label
this line AE2.
Note: if you are not prompted for a label, you have used the wrong drawing tool.
2) Use the point drawing tool to show the new equilibrium levels of GDP and expenditures.Label
this point 'B'.
Y = AE
AEO

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