Suppose the economy is operating at potential employment (Point A). Further suppose a natural disaster shocks...
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Suppose the economy is operating at potential employment (Point A). Further suppose a natural disaster shocks the economy lowering SRAS. The impact on the Aggregate Supply - Aggregate Demand model would be a decrease in short run aggregate supply, shown on the graph below as a shift in the SRAS curve to the left. As a result the economy shifts from its equilibrium (Point A) to Point B. Price B LRAS A GDP SRAS SRAS AD a) Without any government intervention, as a result of the natural disaster, prices [Select] economy experiences [Select ] [Select] a rocoo V in this economy, and this Suppose the economy is operating at potential employment (Point A). Further suppose a natural disaster shocks the economy lowering SRAS. The impact on the Aggregate Supply - Aggregate Demand model would be a decrease in short run aggregate supply, shown on the graph below as a shift in the SRAS curve to the left. As a result the economy shifts from its equilibrium (Point A) to Point B. Price B LRAS A GDP SRAS SRAS AD a) Without any government intervention, as a result of the natural disaster, prices [Select] economy experiences [Select ] [Select] a rocoo V in this economy, and this
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Macroeconomics Principles, Applications, and Tools
ISBN: 978-0132555234
7th Edition
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
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