are my answers right? Using the graph, illustrate the long-run impact of the sharp increase in saving by shifting both the aggregate demand (AD) curve and the short-runaggregate supply (AS) curve in the appropriate directions.PRICE LEVEL240200160120804000200400600800OUTPUT (Billions of dollars)ASAD1AD210001200In the long run, due to the sharp increase in saving, the price levellevel of output, and the unemployment rate returns toADASdecreasesthe natural rate.(?)the quantity of output returns toIthe natural The following graph shows a hypothetical economy in long-run equilibrium at an expected price level of 120 and a natural output level of $600 billion.Suppose households suddenly begin to spend less and save more in order to increase saving for retirement.Using the graph, shift the short-run aggregate supply (AS) curve or the aggregate demand (AD) curve to show the short-run impact of the sharpincrease in saving.PRICE LEVEL2402001601208040O0200400600800OUTPUT (Billions of dollars)ASAD1AD210001200ADAS(?)In the short run, the decrease in consumption spending associated with the increase in saving causes the price level to fall belowthe price level

The AD-AS model combines and brings together the aggregate demand and supply curves to better…

Using the graph, illustrate the long-run impact of the sharp increase in saving by shifting both the aggregate demand (AD) curve and the short-run aggregate supply (AS) curve in the appropriate directions. PRICE LEVEL 240 200 160 120 80 40 0 0 200 400 600 800 OUTPUT (Billions of dollars) AS AD1 AD2 1000 1200 In the long run, due to the sharp increase in saving, the price level level of output, and the unemployment rate returns to | 2 | 2 decreases the natural rate. (?) the quantity of output returns to F the natural

Using the graph, illustrate the long-run impact of the sharp increase in saving by shifting both the aggregate demand (AD) curve and the short-run aggregate supply (AS) curve in the appropriate directions. PRICE LEVEL 240 200 160 120 80 40 0 0 200 400 600 800 OUTPUT (Billions of dollars) AS AD1 AD2 1000 1200 In the long run, due to the sharp increase in saving, the price level level of output, and the unemployment rate returns to | 2 | 2 decreases the natural rate. (?) the quantity of output returns to F the natural

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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