In the chart below concerning the shifts in aggregate supply, arrow B represents an economy that ismoving in response toPAggregatePriceLevelO a decrease in productivityOOShifts in Aggregate SupplyS1a decrease in consumer confidencean decrease in input pricesAS2 If real GDP is not close to potential GDP then_thenand if real GDP is close to or at potential GDPequilibrium occurs in the steep range of AS; equilibrium occurs in the flat range of ASequilibrium occurs in the steep range of AD; equilibrium occurs in the flat range of ADequilibrium occurs in the flat range of AS; equilibrium occurs in the steep range of AS

Aggregate Demand refers to the macroeconomic concept that represents the total demand for goods and…

In the chart below concerning the shifts in aggregate supply, arrow B represents an economy that i moving in response to P Aggregate Price Level O a decrease in productivity OO Shifts in Aggregate Supply S1 a decrease in consumer confidence an decrease in input prices A S2

In the chart below concerning the shifts in aggregate supply, arrow B represents an economy that i moving in response to P Aggregate Price Level O a decrease in productivity OO Shifts in Aggregate Supply S1 a decrease in consumer confidence an decrease in input prices A S2

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter8: Aggregate Demand And The Powerful Consumer

Section: Chapter Questions

Problem 3DQ

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Question

In the chart below concerning the shifts in aggregate supply, arrow B represents an economy that is
moving in response to
P
Aggregate
Price
Level
O a decrease in productivity
OO
Shifts in Aggregate Supply
S1
a decrease in consumer confidence
an decrease in input prices
A
S2

If real GDP is not close to potential GDP then_
then
and if real GDP is close to or at potential GDP
equilibrium occurs in the steep range of AS; equilibrium occurs in the flat range of AS
equilibrium occurs in the steep range of AD; equilibrium occurs in the flat range of AD
equilibrium occurs in the flat range of AS; equilibrium occurs in the steep range of AS

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