Exhibit 14A-2 Macro AD-AS Model Price Level CPI 130 120 110 100 90 O 1 1 1 1 1 1 9.0 1 1 9.5 LRAS SRAS AD 10.0 10.5 11.0 11.5 Real GDP (trillions of dollars per year) In Exhibit 14A-2, the intersection of AD with SRAS indicates: O a short-run equilibrium. O a long-run equilibrium. O that the economy needs policies to reduce unemployment. O that the economy is at full employment.

Exhibit 14A-2 Macro AD-AS Model Price Level CPI 130 120 110 100 90 O 1 1 1 1 1 1 9.0 1 1 9.5 LRAS SRAS AD 10.0 10.5 11.0 11.5 Real GDP (trillions of dollars per year) In Exhibit 14A-2, the intersection of AD with SRAS indicates: O a short-run equilibrium. O a long-run equilibrium. O that the economy needs policies to reduce unemployment. O that the economy is at full employment.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section: Chapter Questions

Problem 2TY

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