Question

IE 10-1 ... AS/AD Model – Suppose this economy is at Year 4 as a result of an "over-expansion" of the Money Supply by the FED. With the Price Level at $2.34 and employment at __________, the Real Production GDP will be $5200 b. In the PPF Model the economy will be at Point _________ ..

Answer 1

Answer:

Employment at 122 million. At Point S.

Explanation:

The economy system is known as Demand Inflation. This is the economic condition that exists when the total aggregate demand for goods and services is more than the total aggregate supply of goods and services. It is also referred to as the demand-pull inflation and it occurs when there is insufficient supply which leads to an increase in price. Therefore, employment is at approximately 122 million and the economy is at point S.