The economy of Chicagoland is currently producing $65 Million worth of goods and services (current real GDP). Full employment output for Chicagoland is $75 Million worth of goods and services (full employment real GDP). The price level has been declining recently. This has occurred due to a negative AD shock.
Use an AD/AS graph to show the macroeconomy of Chicagoland. Label the graph correctly.
First, show the long run equilibrium of Chicagoland using aggregate
Then, use Y1 to represent the current real GDP and PL1 to represent the current price level.
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