Price Level P 0 LRAS E YfY Inflationary Gap AS AD2 AD 1 Real Output

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter2: Choice In A World Of Scarcity
Section: Chapter Questions
Problem 24P: If the price of a magazine is 4 each, what is the maximum number of magazines she could buy in a...
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Based on the graphs, use one of the three traditional monetary tools to explain how to close
recessionary and, also, inflationary gaps.

Price
Level
P
P₁
0
LRAS
DIE
Yf Y
Inflationary Gap
AS
AD2
AD 1
Real Output
Transcribed Image Text:Price Level P P₁ 0 LRAS DIE Yf Y Inflationary Gap AS AD2 AD 1 Real Output
Price
Level
P₁
P
0
E
LRAS
↑
E
Y Yf
Deflationary Gap
AS
AD'
AD
Real Output
Transcribed Image Text:Price Level P₁ P 0 E LRAS ↑ E Y Yf Deflationary Gap AS AD' AD Real Output
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