Use the AD/AS model below to answer the following questions. In each case, assume the economy starts in long- and short-run equilibrium. Price Level (base = 100) 100.0 The Macroeconomy in long- and short-run equilibrium LRAS Real GDP AD₁ SRAS₁ a. Suppose there is a decrease in consumer confidence. Instuctions: Drag the appropriate line in the correct direction to show the short-run effect on the AD/AS model. In the short run, this will (Click to select) b. In the long-run, if the government takes no action to help the economy, (Click to select) (Click to select and output (Click to select V c. Suppose, instead, the government decides to take action to help the economy, using monetary policy. You can recommend (Click to select) This policy will (Click to select) (Click to select) Rectangula and (Click to select) The price level
Use the AD/AS model below to answer the following questions. In each case, assume the economy starts in long- and short-run equilibrium. Price Level (base = 100) 100.0 The Macroeconomy in long- and short-run equilibrium LRAS Real GDP AD₁ SRAS₁ a. Suppose there is a decrease in consumer confidence. Instuctions: Drag the appropriate line in the correct direction to show the short-run effect on the AD/AS model. In the short run, this will (Click to select) b. In the long-run, if the government takes no action to help the economy, (Click to select) (Click to select and output (Click to select V c. Suppose, instead, the government decides to take action to help the economy, using monetary policy. You can recommend (Click to select) This policy will (Click to select) (Click to select) Rectangula and (Click to select) The price level
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Use the AD/AS model below to answer the following questions. In each case, assume the economy starts in long- and short-run
equilibrium.
Price Level (base = 100)
100.0
The Macroeconomy
in long- and short-run equilibrium
LRAS
Real GDP
AD₁
SRAS₁
a. Suppose there is a decrease in consumer confidence.
Instuctions: Drag the appropriate line in the correct direction to show the short-run effect on the AD/AS model.
In the short run, this will (Click to select)
b. In the long-run, if the government takes no action to help the economy, [(Click to select)
(Click to select and output[(Click to select
V
c. Suppose, instead, the government decides to take action to help the economy, using monetary policy. You can recommend
(Click to select)
This policy will (Click to select)
(Click to select)
Rectangula
and (Click to select)
The price level
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