The graphs below illustrate an initial equilibrium for the economy. Suppose that the stock market broadly increases. Use the graphs to show the new positions of aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS) in both the short-run and the long-run, as well as the short-run and long-run equilibría resulting from this change. Then answer what happens to the price level and real GDP (or aggregate output). Short-Run Graph Long-Run Graph SRAS Short-Run Equilibrium NANA LRAS Real GDP In the short-run, the price level decreases and GDP stays the same LRAS Long-Run Equilibrium AD SRAS Real GDP In the long-run, the price level stays the same and GDP decreases
The graphs below illustrate an initial equilibrium for the economy. Suppose that the stock market broadly increases. Use the graphs to show the new positions of aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS) in both the short-run and the long-run, as well as the short-run and long-run equilibría resulting from this change. Then answer what happens to the price level and real GDP (or aggregate output). Short-Run Graph Long-Run Graph SRAS Short-Run Equilibrium NANA LRAS Real GDP In the short-run, the price level decreases and GDP stays the same LRAS Long-Run Equilibrium AD SRAS Real GDP In the long-run, the price level stays the same and GDP decreases
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Solve all this question......you will not solve all questions then I will give you down?? upvote.........
![The graphs below illustrate an initial equilibrium for the economy. Suppose that the stock market broadly
increases.
Use the graphs to show the new positions of aggregate demand (AD), short-run aggregate supply (SRAS),
and long-run aggregate supply (LRAS) in both the short-run and the long-run, as well as the short-run and
long-run equilibria resulting from this change. Then answer what happens to the price level and real GDP (or
aggregate output).
Short-Run Graph
Long-Run Graph
LRAS
Aggregate Price Level
LRAS
AD
SRAS
Short-Run Equilibrium
Real GDP
In the short-run, the price level decreases
and GDP stays the same
Aggregate Price Level
Long-Run Equilibrium
AD
SRAS
Real GDP
In the long-run, the price level stays the same
and GDP decreases](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F95784bf3-d11a-4517-938c-282f6f0bb192%2Fbdd96330-8a93-4351-a961-410e8e436469%2Ftsbxja_processed.png&w=3840&q=75)
Transcribed Image Text:The graphs below illustrate an initial equilibrium for the economy. Suppose that the stock market broadly
increases.
Use the graphs to show the new positions of aggregate demand (AD), short-run aggregate supply (SRAS),
and long-run aggregate supply (LRAS) in both the short-run and the long-run, as well as the short-run and
long-run equilibria resulting from this change. Then answer what happens to the price level and real GDP (or
aggregate output).
Short-Run Graph
Long-Run Graph
LRAS
Aggregate Price Level
LRAS
AD
SRAS
Short-Run Equilibrium
Real GDP
In the short-run, the price level decreases
and GDP stays the same
Aggregate Price Level
Long-Run Equilibrium
AD
SRAS
Real GDP
In the long-run, the price level stays the same
and GDP decreases
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education