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Need some help with these questions, thanks! The following graph shows an aggregate demand curve (AD) illustrating die inverse relationship between the price level and
Need some help with these questions, thanks!
The following graph shows an aggregate demand curve (AD) illustrating die inverse relationship between the price level and the quantity of real output in the United States. Show the effect of the following scenario on the aggregate demand curve by either dragging the curve or moving the point to the appropriate position {do not perform both actions as only one is correct). The price level decreases and die prices of U.S. goods decrease relative to foreign goods, causing U.S. imports to decline and U.S. exports to rise. PRICE IJEVEL REAL GDP Complete the following table by matching the macroeconomic assumptions about aggregate supply to the appropriate school of thought. Assumption Classical Keynesian Only an increase in aggregate demand can move an economy out of a recession and back to potential real GDP quickly. O O Product prices and wages tend to be inflexible. O O The following graph shows the aggregate demand (AD) and aggregate supply (AS) curves for a hypothetical economy that is currently operating below its full-employment output level. That is, the economy is currently in a recession. The aggregate supply curve (AS) in this diagram is consistent with the view of aggregate supply. According to this viewpoint, the government should spending in response to the recession. Shift the appropriate curve on the graph to illustrate the impact of this change in government spending. O AD AS AS PRICE LEVEL AD REAL GDP (Trillions of dollars) The prescribed change in government spending will: Increase the price level with no change in real GDP Move the economy toward full employment with no change in the price level Increase the price level and decrease real GDPStep by Step Solution
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