University:
University of Memphis
Course:
ECON 2010 | Intro to Macroeconomics
Academic year:

2024
Views:

413

Pages:

1
Author:

Nyasia Cardenas

Question 2 Using an Aggregate Demand/Aggregate Supply framework, start with the macroeconomy in a recessionary gap. A regulatory change makes electricity cheaper in the short-run. What would be the impact on the broader economy from the regulatory change. Show the initial equilibrium, price level and equilibrium real GDP and position of the long-run aggregate supply curve, the short-run aggregate supply curve, and the aggregate demand curve. The show the changes and new equilibrium price level and real GDP. 15 Points. Graph is required. Answer 039;s potential output, whereas the SRAS curve is upward sloping, reflecting the shortrun adjustment of output to changes in prices. In a recessionary gap, the SRAS curve is left of the LRAS curve, indicating a decrease in output and prices. Now, let&

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