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Consider the figures below and determine which is the best description of what causes the shift from AD, to AD₂ Example (A) LRAS SRAS P1 P2 P2 XXX P1 AD₂ B A y2y1 Real GOP Example (B) LRAS OA Example A shows a contractionary monetary policy. The price level and real GDP both fall. OB. Example B shows an expansionary monetary policy. The price level and real GDP both rise. OC. Both examples show expansionary monetary policy. The price level and real GDP both rise. OD. Example A shows an expansionary monetary policy. The price level rises and real GDP falls. OE. Both A and B. SRAS AD₂ y1y2 AD₁ Real GDP G

Consider the figures below and determine which is the best description of what causes the shift from AD, to AD₂ Example (A) LRAS SRAS P1 P2 P2 XXX P1 AD₂ B A y2y1 Real GOP Example (B) LRAS OA Example A shows a contractionary monetary policy. The price level and real GDP both fall. OB. Example B shows an expansionary monetary policy. The price level and real GDP both rise. OC. Both examples show expansionary monetary policy. The price level and real GDP both rise. OD. Example A shows an expansionary monetary policy. The price level rises and real GDP falls. OE. Both A and B. SRAS AD₂ y1y2 AD₁ Real GDP G

Exploring Economics
Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter22: Aggregate Demand And Aggregate Supply
Section: Chapter Questions
Problem 1P
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Consider the figures below and determine which is the best description of what causes the shift from AD₁ to AD₂. Price level (GDP deflator) P1 P2 Example (A) LRAS SRAS B |y2 y1 Real GDP AD₁ AD2 O A. Example A shows a contractionary monetary policy. The price level and real GDP both fall. B. Example B shows an expansionary monetary policy. The price level and real GDP both rise. C. Both examples show expansionary monetary policy. The price level and real GDP both rise. D. Example A shows an expansionary monetary policy. The price level rises and real GDP falls. OE. Both A and B. Price Level: (GDP deflator) P2 P1 Example (B) LRAS ************ .... y1y2 Real GDP SRAS AD2 AD₁

Consider the figures below and determine which is the best description of what causes the shift from AD, to AD2₂ P1 P2 Example (A) LRAS SRAS B y2 vị Real GDP AD₂ 3 OA Example A shows a contractionary monetary policy. The price level and real GDP both fall. OB. Example B shows an expansionary monetary policy. The price level and real GDP both rise. OC. Both examples show expansionary monetary policy. The price level and real GDP both rise. OD. Example A shows an expansionary monetary policy. The price level rises and real GDP falls. OE. Both A and B. P2 P1 Example (B) LRAS y1y2 Real GDP SRAS AD2 AD₁ 5
Transcribed Image Text:Consider the figures below and determine which is the best description of what causes the shift from AD, to AD2₂ P1 P2 Example (A) LRAS SRAS B y2 vị Real GDP AD₂ 3 OA Example A shows a contractionary monetary policy. The price level and real GDP both fall. OB. Example B shows an expansionary monetary policy. The price level and real GDP both rise. OC. Both examples show expansionary monetary policy. The price level and real GDP both rise. OD. Example A shows an expansionary monetary policy. The price level rises and real GDP falls. OE. Both A and B. P2 P1 Example (B) LRAS y1y2 Real GDP SRAS AD2 AD₁ 5
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