There is a decrease in AD. ow on one AГА dra prices in both the short-run and the long-run. Mark the starting price and output P₁ and QN. Mark the price and output at the end of the short-run P₂ and Q2. Mark the price and output at the end of the long-run P3 and Q3. Be sure to label all the lines on your diagram, and if a line shifts, mark the order of the shifts with subscript numbers after the symbols (for example AD₁ shifts to become AD2). Next to the diagram, state the effect on prices, output, unemployment, and wages in both the short-run and long-run. Assume we start at QN.

There is a decrease in AD. ow on one AГА dra prices in both the short-run and the long-run. Mark the starting price and output P₁ and QN. Mark the price and output at the end of the short-run P₂ and Q2. Mark the price and output at the end of the long-run P3 and Q3. Be sure to label all the lines on your diagram, and if a line shifts, mark the order of the shifts with subscript numbers after the symbols (for example AD₁ shifts to become AD2). Next to the diagram, state the effect on prices, output, unemployment, and wages in both the short-run and long-run. Assume we start at QN.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 30RQ: Name some factors that could cause AD to shift, and say whether they would shift AD to the tight or...

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