Suppose that in Year 1 the price level equals 110 and the output level equals $14 trillion

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Suppose that in Year 1 the price level equals 110 and the output level equals $14 trillion and that in Year 2 the price level equals 104 and the output level equals $13 trillion. In the AD–AS model, what shift in the aggregate demand curve or the aggregate supply curve would explain the movement in the price level and the output level that occurred from Year 1 to Year 2?

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Money Banking And The Financial System

ISBN: 1801

3rd Edition

Authors: R. Glenn Hubbard, Anthony Patrick O'Brien

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