Question: The graph below shows the AD-AS diagram The graph below shows the AD-AS diagram for Brazil. Ouppose that the economy is initially in long-run equilibrium

The graph below shows the AD-AS diagram

The graph below shows the AD-AS diagram for Brazil. Ouppose that the economy is initially in long-run equilibrium with the price level of 800. Now suppose that the Aggregate Demand (AD) curve shifts right from AD1 (blue) to AD2 (green). 1200* 1 100 1000 900 800 700 600 50RAST 400 Price Level 300 -200 - 100 LRAS 100 20 298p 400 500 600 700 800 900 1000 1100 126 a) What is the new GDP in the short-run as a result of this shift? b) What is the new price level in the short-run as a result of this shift? c) What is the price level in the new long-run equilibrium as a result of this shift? d) What is GDP in the new long-run equilibrium as a result of this shift? e) What causes the economy to move from the short-run equilibrium to the new long-run equilibrium

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