Again, the following graph shows the economy in long-run equilibrium at the expected price level of 120 and potential output of $300 billion before the increase in investment spending due to the new tax credit. Now, show the long-run impact of the investment tax credit by shifting both the aggregate demand (AD) curve and the short-run aggregate supply ( SRAS) curve to the appropriate positions. (Note: Assume that the investment tax credit does not cause a change in the economy's resources, technology, or productivity.) PRICE LEVEL 240 200 180 120 80 40 0 100 SRAS 200 300 400 REAL GDP (Billions of dollars) AD 500 600 AD In the long run, as a result of the investment tax credit, the price level output, and the unemployment rate SRAS ? During the transition from the short run to the long run, price level expectations will curve will shift to the the natural rate of unemployment. " and the the quantity of output f potential

Again, the following graph shows the economy in long-run equilibrium at the expected price level of 120 and potential output of $300 billion before the increase in investment spending due to the new tax credit. Now, show the long-run impact of the investment tax credit by shifting both the aggregate demand (AD) curve and the short-run aggregate supply ( SRAS) curve to the appropriate positions. (Note: Assume that the investment tax credit does not cause a change in the economy's resources, technology, or productivity.) PRICE LEVEL 240 200 180 120 80 40 0 100 SRAS 200 300 400 REAL GDP (Billions of dollars) AD 500 600 AD In the long run, as a result of the investment tax credit, the price level output, and the unemployment rate SRAS ? During the transition from the short run to the long run, price level expectations will curve will shift to the the natural rate of unemployment. " and the the quantity of output f potential

Macroeconomics: Principles and Policy (MindTap Course List)

13th Edition

ISBN:9781305280601

Author:William J. Baumol, Alan S. Blinder

Publisher:William J. Baumol, Alan S. Blinder

Chapter10: Bringing In The Supply Side: Unemployment And Inflation?

Section: Chapter Questions

Problem 3TY

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