The following graph shows the economy in long-run equilibrium at the expected price level of 120 and the natural level of output of $300 billion.
The following graph shows the economy in long-run equilibrium at the expected price level of 120 and the natural level of output of $300 billion. Suppose households suddenly begin to spend less and save more in order to increase saving for retirement.
Shift the short-run aggregate supply (AS) curve or the aggregate demand (AD) curve to show theshort-runimpact of the sharp increase in saving.
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Authors: Jeffrey F Beatty, Susan S Samuelson
3rd Edition
0324537123, 9780324537123
