In the following figure, an economy is currently in short-run equilibrium at point a. What is likely to happen in the long run? LRAS SRAS Aggregate Output (0) SRAS will shift to the left and the aggregate price level will decrease. SRAS will shift to the right and the aggregate price level will decrease. SRAS will shift to the right and the aggregate price level will increase. SRAS will shift to the left and the aggregate price level will increase. Aggregate Price Level (P)
In the following figure, an economy is currently in short-run equilibrium at point a. What is likely to happen in the long run? LRAS SRAS Aggregate Output (0) SRAS will shift to the left and the aggregate price level will decrease. SRAS will shift to the right and the aggregate price level will decrease. SRAS will shift to the right and the aggregate price level will increase. SRAS will shift to the left and the aggregate price level will increase. Aggregate Price Level (P)
Chapter14: Aggregate Demand And Supply
Section14.A: The Self Correcting Aggregate Demand And Supply Model
Problem 1SQP
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Question
![In the following figure, an economy is currently in short-run equilibrium at point a. What is likely to happen in the long
run?
LRAS
SRAS
a
AD
AD
Aggregate Output (0)
SRAS will shift to the left and the aggregate price level will decrease.
SRAS will shift to the right and the aggregate price level will decrease.
SRAS will shift to the right and the aggregate price level will increase.
SRAS will shift to the left and the aggregate price level will increase.
Aggregate Price Level (P)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F67f983c7-3ed8-43f1-a145-26468c425679%2F85870d8c-b1b4-4dcc-8114-8ab57e6f2b72%2Fnelkvat_processed.jpeg&w=3840&q=75)
Transcribed Image Text:In the following figure, an economy is currently in short-run equilibrium at point a. What is likely to happen in the long
run?
LRAS
SRAS
a
AD
AD
Aggregate Output (0)
SRAS will shift to the left and the aggregate price level will decrease.
SRAS will shift to the right and the aggregate price level will decrease.
SRAS will shift to the right and the aggregate price level will increase.
SRAS will shift to the left and the aggregate price level will increase.
Aggregate Price Level (P)
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