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If real GDP is well above potential GDP in the short-run what will happen in the long run if the government does not intervene? [It
If real GDP is well above potential GDP in the short-run what will happen in the long run if the government does not intervene? [It would help to create a graph with Aggregate Demand, Short-run Aggregate Supply, and Long-run Aggregate Supply]. Check all the correct answers. Select one or more: a. Nominal wages will eventually rise causing the SAS curve to shift to the left b. Potential GDP will begin to rise because firms will be motivated to produce more c. Nominal interest rates will fall causing further increases in AD d. Unemployment compensation and welfare payments will fall shifting the Aggregate Demand back to the left e. Nothing will ever happen unless the government intervenes
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