Question: Consider the following aggregate demand, aggregate supply (AD/AS) model. (a) Identify the point of equilibrium for this economy. (2marks) (b) What would happen to the

Consider the following aggregate demand, aggregate supply (AD/AS) model.

(a) Identify the point of equilibrium for this economy.(2marks)

(b) What would happen to the equilibrium you identified in Part (a) if consumption levels in this economy increased? Explain your answer.(4marks)

(c) What would happen to the equilibrium you identified in Part (a) if there is an increase in wages? Explain your answer.(4marks)

Consider the following aggregate demand, aggregate supply (AD/AS) model. (a) Identify the

130 LAS SAS 120 110 100 90 80 = AD GDP 0.8 0.9 1.0 1.1 1.2 1.3

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