Suppose that the equation for a particular short-run AS curve is P 5 20 1. 5 Q,
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Suppose that the equation for a particular short-run AS curve is P 5 20 1. 5 Q, where P is the price level and Q is real output in dollar terms. What is Q if the price level is 120? Suppose that the Q in your answer is the full-employment level of output. By how much will Q increase in the short run if the price level unexpectedly rises from 120 to 132? By how much will Q increase in the long run due to the price level increase?
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ANSWER The shortrun Aggregate Supply AS curve is given by the equation P2015Q where P is the price l...View the full answer
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Related Book For 
Macroeconomics
ISBN: 9780077337728
19th Edition
Authors: Campbell Mcconnell, Stanley Brue, Sean Flynn, Flynn Mcconnell Brue
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