If the economy is in Y1 in the graph below, and there is no intervention from...
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If the economy is in Y1 in the graph below, and there is no intervention from fiscal and monetary policy, then, over time: AD-AS Price level P₁ AD Y₁ LRAS Y SRAS Real GDP the AD curve will shift out to bring the economy back to long-run equilibrium. the LRAS curve will shift in to bring the economy back to long-run equilibrium. SRAS curve will shift to bring economy back long-run equilibrium. the economy will stay where it is, until it is hit by another shock. If the economy is in Y1 in the graph below, and there is no intervention from fiscal and monetary policy, then, over time: AD-AS Price level P₁ AD Y₁ LRAS Y SRAS Real GDP the AD curve will shift out to bring the economy back to long-run equilibrium. the LRAS curve will shift in to bring the economy back to long-run equilibrium. SRAS curve will shift to bring economy back long-run equilibrium. the economy will stay where it is, until it is hit by another shock.
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Related Book For
Financial Accounting An Introduction to Concepts, Methods and Uses
ISBN: 978-1133591023
14th edition
Authors: Roman L. Weil, Katherine Schipper, Jennifer Francis
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