Consider an economy originally at P = P and Y = Y*. The income of the...
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Consider an economy originally at P = P₁ and Y = Y*. The income of the economy's trading partners increases. In the new long-run equilibrium, Price will be lower than P₁ and output will be equal to the natural output. Price will be lower than P₁ and output will be less than the natural output. Price will be higher than P₁ and output will be equal to the natural output. Price will be higher than and output will be greater than the natural output. Consider an economy originally at P = P₁ and Y = Y*. The income of the economy's trading partners increases. In the new long-run equilibrium, Price will be lower than P₁ and output will be equal to the natural output. Price will be lower than P₁ and output will be less than the natural output. Price will be higher than P₁ and output will be equal to the natural output. Price will be higher than and output will be greater than the natural output.
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In the new longrun equilibrium when the income of the ec... View the full answer
Related Book For
Principles Of Macroeconomics
ISBN: 9781292303826
13th Global Edition
Authors: Karl E. Case,Ray C. Fair , Sharon E. Oster
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