Question: acer Exercise 16.1 AS $ LRAS Exercise 16. 2 (3 APL $ APL The SRAST P4 Keynesian View ! 93 Pz - 42- AD 5

acer Exercise 16.1 AS $ LRAS Exercise 16. 2 (3 APL $ APL The SRAST P4 Keynesian View ! 93 Pz - 42- AD 5 P1 - - - AD 4 IADZ AD3 AD 2 AD AD 1 Y2 Y's Yq Yf Real GDP = Yf Real GDP = Y Y * Explain why Y1 - If represents * What does if mean a deflationary gap and spare capacity * Ex lain what happens in short * Explain why the economy could run if an increase in AD be " stuck" at ADA * Explain what happen in * Explain what will happen if : - AD1 - ADZ long run ? ->AD3 - ADy ->AS - ADG 4+

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