Question

IE 9-3 ... AS/AD Model – Suppose this economy was momentarily at Full Employment, but has now experienced a continuation of the RIGHT shifting AD caused by increased "G" spending . If the Price Level increases to $2.34, then Real Production GDP will have increased to $5200 b and ______ people will have gained jobs. In the Business Cycle the economy will have moved from Point "x" toward Point _________ .

Answer 1

Suppose this economy was momentarily at Full Employment, but has now experienced a continuation of the RIGHT shifting AD caused by increased "G" spending . If the Price Level increases to $2.34, then Real Production GDP will have increased to $5200 b and 2 million people will have gained jobs. In the Business Cycle the economy will have moved from Point "x" toward Point y.

Explanation:

The AD-AS model (Aggregate production aggregate) demonstrates national income calculation and price level adjustments.

This shows how various events will change in two of our major macroeconomic indicators: Actual GDP and inflation.

• Label all equilibrium in the axis, the interior
• The positioning of LRAS provides important economic information, for example, if the efficiency of balance is on the left side of the LRAS, the economy is in recession.