In the graph below, the equilibrium price level and the equilibrium real GDP are found where the two curves If the actual price level exceeds the equilibrium price level, then it is the case that AD ◆ the economy's production potential (LRAS). If the actual price level is below the equilibrium price level, then it is the case that (AD) the economy's production potential (LRAS). Price Level LRAS₁ A Real GDP ($ trillions per year) AD₁

In the graph below, the equilibrium price level and the equilibrium real GDP are found where the two curves If the actual price level exceeds the equilibrium price level, then it is the case that AD ◆ the economy's production potential (LRAS). If the actual price level is below the equilibrium price level, then it is the case that (AD) the economy's production potential (LRAS). Price Level LRAS₁ A Real GDP ($ trillions per year) AD₁

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Production And Growth

Section: Chapter Questions

Problem 5CQQ

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