The graph on the next page shows the goods market in equilibrium at output Y1 .Then the
Question:
a. What could have caused this shift in aggregate expenditures?
b. Carefully explain the process by which the economy will adjust to the new equilibrium.
Transcribed Image Text:
ФФ 2 45° Y. output, γ
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a The slope of the AE curve has not changed so the marginal propensity to c...View the full answer
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Related Book For
Macroeconomics
ISBN: 9780132109994
1st Edition
Authors: Glenn Hubbard, Anthony Patrick O'Brien, Matthew P Rafferty
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