Price Level 110 = o

110 100 90 AADI LRAS 200 AS ADI 250 AD2 100 150 The economy is initially at long-run equilibrium. Aggregate demand decreases and shifts from AD2 to ADI and in the short-run output is below full- employment level of output. a) What is the change in aggregate demand required for the economy to return to full employment level of real GDP? b) If mpc=O.8, what is the change in government purchases required? c) If mpc=O.8, what is the change in