Question: what will be the steps to show that what will happen to this economy during the adjustment process ? what will be the equilibrium output

what will be the steps to show that what will happen to this economy during the adjustment process ? what will be the equilibrium output and price level after the adjustment ?

AS Price Level P2 C B Po AD Y1 Real GDP FIGURE 24-2 Refer to Figure 24-2. The economy is currently in a short-run equilibrium at Y1. Now consider the model of the adjustment process where factor prices are endogenous but potential output is fixed. What will happen to this economy during the adjustment process? What will be the equilibrium output and price level after the adjustment? Clearly describe all steps in your answer and also show it in the graph above. [Redraw the graph in paper and upload it in the submission folder]

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