Question

IE 9-2 ... PPF Model – If this economy has encountered a Recovery from Point "R" to Point "X" (as viewed by the Keynesian Model), then one Risk is a movement toward Point "P" with _________________. The corresponding AS/AD Model would move from a Price Level of $2.00 to __________ .

Answer 1

Answer:

Severe Inflation

Above $2.34

Explanation:

If this economy has encountered a Recovery from Point "R" to Point "X" (as viewed by the Keynesian Model), then one Risk is a movement toward Point "P" with severe inflation. The corresponding AS/AD Model would move from a Price Level of $2.00 to above $2.34.