The following graph shows several aggregate demand and aggregate supply curves for an economy whose potential output is $5 trillion. The curves are labelled a, b, c, and d. Three points on the graph are also indicated by grey stars and labelled K, L, and M. 100 90 80 M. 70 60 50 40 30 20 1 3 5 7 4 REAL GDP (Trillions of dollars) Identify which curve on the previous graph corresponds to each description in the following table. If the curve described does not appear on the gra choose Not Shown. Description Not Shown a Long-run aggregate supply (LRAS) Short-run aggregate supply (SRAS) when the economy is at long-run equilibrium Short-run aggregate supply (SRAS) when there is an inflationary gap Short-run aggregate supply (SRAS) when there is a recessionary gap Aggregate demand (AD) PRICE LE VEL
The following graph shows several aggregate demand and aggregate supply curves for an economy whose potential output is $5 trillion. The curves are labelled a, b, c, and d. Three points on the graph are also indicated by grey stars and labelled K, L, and M. 100 90 80 M. 70 60 50 40 30 20 1 3 5 7 4 REAL GDP (Trillions of dollars) Identify which curve on the previous graph corresponds to each description in the following table. If the curve described does not appear on the gra choose Not Shown. Description Not Shown a Long-run aggregate supply (LRAS) Short-run aggregate supply (SRAS) when the economy is at long-run equilibrium Short-run aggregate supply (SRAS) when there is an inflationary gap Short-run aggregate supply (SRAS) when there is a recessionary gap Aggregate demand (AD) PRICE LE VEL
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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