URGENT!!! please help mee thankyouuuu 1. Consumerism (E) preaches the concept of happiness through consumption. Supposepeople desire to save less and consume more due to the promotion of consumerism.(a) With the aid of a diagram, explain how this event affects real national income and the generalprice level in the short run.(b) With the aid of a diagram, explain the adjustment from short run equilibrium to long runequilibrium.(c) From the result in (b) about the change in the general price level, what economicphenomenon can be observed? Define the economic phenomenon.

Answered: 1. Consumerism (E) preaches the concept…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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URGENT!!! please help mee thankyouuuu

1. Consumerism (E) preaches the concept of happiness through consumption. Suppose
people desire to save less and consume more due to the promotion of consumerism.
(a) With the aid of a diagram, explain how this event affects real national income and the general
price level in the short run.
(b) With the aid of a diagram, explain the adjustment from short run equilibrium to long run
equilibrium.
(c) From the result in (b) about the change in the general price level, what economic
phenomenon can be observed? Define the economic phenomenon.

Expert Solution

Step 1: Introduction

Aggregate demand refers to the total demand for all goods and services produced in an economy in a given fiscal year. Short-run aggregate supply refers to the total supply of all goods and services produced in an economy in a given fiscal year. The long-run aggregate supply represents the output of an economy at full employment of resources, i.e., the potential output of an economy.

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