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Economic fluctuations The following graph shows the economy in long - run equilibrium at an expected price level of 1 2 0 and potential output
Economic fluctuations
The following graph shows the economy in longrun equilibrium at an expected price level of and potential output of $ billion. Suppose the economies of several foreign countries experience rapidly growing incomes, causing foreign spending on domestic goods and services to increase.
Shift the shortrun aggregate supply SRAS curve or the aggregate demand AD curve to show the shortrun impact of the economic prosperity abroad on the grapht.
Note: Select anddrag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and sit snaps back to its original position, justdrag it a little farther:
AD
SRAS
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