The economy starts out on the curves AD, and SAS, Suppose that people expect deflation (a falling price level), but aggregate demand remains at AD Show what happens to the short-run and long-run aggregate supply curve. Label Price level (GDP deflator, 2009 - 100) LAS 240 200 the new curve. SAS Draw a point at the new macroeconomic equilibrium. 160 When it becomes obvious to everyone that the deflation is not going to occur, 120 120 A. long-run aggregate supply increases B. the money wage rate falls further C. aggregate demand decreases OD. the money wage rate rises and the short-run aggregate supply curve 80 AD 40 returns to its original position 10 11 12 13 14 15 Real GDP (rilions of 2009 dollars) >>> Draw only the objects specified in the question.

The economy starts out on the curves AD, and SAS, Suppose that people expect deflation (a falling price level), but aggregate demand remains at AD Show what happens to the short-run and long-run aggregate supply curve. Label Price level (GDP deflator, 2009 - 100) LAS 240 200 the new curve. SAS Draw a point at the new macroeconomic equilibrium. 160 When it becomes obvious to everyone that the deflation is not going to occur, 120 120 A. long-run aggregate supply increases B. the money wage rate falls further C. aggregate demand decreases OD. the money wage rate rises and the short-run aggregate supply curve 80 AD 40 returns to its original position 10 11 12 13 14 15 Real GDP (rilions of 2009 dollars) >>> Draw only the objects specified in the question.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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