ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Pls help with below homework.

Based on the given figure, the economy is initially in long-run equilibrium at point A. If there is a
favorable supply shock that increases potential output and shifts the long-run aggregate supply
gap and the short-run aggregate supply
curve from LRAS to LRAS', then there is initially
curve will
LAS LRAS
SRAS
SRAS
SRAS"
AD
Oue
Select one:
O a. a recessionary; eventually shift to SRAS'
O b. a recessionary; eventually shift to SRAS"
O c. an expansionary; eventually shift to SRAS"
O d. an expansionary; eventually shift to SRAS'
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Transcribed Image Text:Based on the given figure, the economy is initially in long-run equilibrium at point A. If there is a favorable supply shock that increases potential output and shifts the long-run aggregate supply gap and the short-run aggregate supply curve from LRAS to LRAS', then there is initially curve will LAS LRAS SRAS SRAS SRAS" AD Oue Select one: O a. a recessionary; eventually shift to SRAS' O b. a recessionary; eventually shift to SRAS" O c. an expansionary; eventually shift to SRAS" O d. an expansionary; eventually shift to SRAS'
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