ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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M1
Desired Aggregate Expenditure
Yo Y₂
G
Yo
Y₂
FIGURE 23-1
Refer to Figure 23-1. Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point V. The price level is P 0
Now, suppose the AE curve shifts to AE 1 and we move to a new equilibrium level of GDP at Y ₁ and point F on AD 1
A possible cause of this change in equilibrium is
O an exogenous rise in the price level.
O an exogenous fall in the price level.
O an increase in government purchases.
O a decrease in desired net exports.
O an increase in autonomous consumption.
Y₁
AE-Y
AF2
AFO
Real GDP
AD2
ADI ADO
Real GDP
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Transcribed Image Text:Desired Aggregate Expenditure Yo Y₂ G Yo Y₂ FIGURE 23-1 Refer to Figure 23-1. Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point V. The price level is P 0 Now, suppose the AE curve shifts to AE 1 and we move to a new equilibrium level of GDP at Y ₁ and point F on AD 1 A possible cause of this change in equilibrium is O an exogenous rise in the price level. O an exogenous fall in the price level. O an increase in government purchases. O a decrease in desired net exports. O an increase in autonomous consumption. Y₁ AE-Y AF2 AFO Real GDP AD2 ADI ADO Real GDP
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