Asked by Skyler Compo on Jun 09, 2024
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The figure below shows equilibrium in an aggregate demand-aggregate supply model.In this figure,the shift from AS to AS' is likely to occur when:
A) the actual price level is higher than expected.
B) the actual price level is lower than expected.
C) the unemployment rate is lower than the natural rate.
D) the actual output is more than the potential output.
E) the aggregate demand curve intersects the short-run aggregate supply curve at the potential output.
Actual Price Level
The current average of all prices of goods and services in an economy, indicating the cost of living and the economic environment.
Potential Output
The maximum amount of goods and services an economy can produce when it is fully employing its resources.
Aggregate Demand
The total demand for all goods and services in an economy at various price levels, over a specific time period.
- Familiarize yourself with the factors that lead to modifications in the aggregate supply curves in the short and long term.
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Learning Objectives
- Familiarize yourself with the factors that lead to modifications in the aggregate supply curves in the short and long term.
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