• Equilibrium price level, labeled PL1 Equilibrium real output, labeled Y1 • Assume there is an increase in imports to Econland. Using your graph, show the effect of the increase in imports to the short-run equilibrium of Econland. Label the new level of output Y2 and the new price level PL2.

• Equilibrium price level, labeled PL1 Equilibrium real output, labeled Y1 • Assume there is an increase in imports to Econland. Using your graph, show the effect of the increase in imports to the short-run equilibrium of Econland. Label the new level of output Y2 and the new price level PL2.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter14: Aggregate Demand And Supply

Section14.A: The Self Correcting Aggregate Demand And Supply Model

Problem 1SQP

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Question

Draw a correctly labeled graph of short-run aggregate supply, long-run aggregate supply, and aggregate demand.

Show each of the following in your graph. Assume the economy of Econland is in long-run equilibrium with full employment.

Equilibrium price level, labeled PL1
Equilibrium real output, labeled Y1
• Assume there is an increase in imports to Econland. Using your graph, show the effect of the increase in imports to
the short-run equilibrium of Econland. Label the new level of output Y2 and the new price level PL2.

Definition Definition Total supply of goods and services in an economy at a certain price level in a specific time period.

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