Suppose the economy is self-regulating, the price level is 132, the quantity demanded of Real GDP is 4 trillion, the quantity supplied of Real GDP in the short run is 3.9 trillion, and the quantity supplied of Real GDP in the long run is 4.3 trillion. Is the economy in short-run equilibrium? Will the price level in long-run equilibrium be greater than, less than, or equal to 132? Show the relevant graph and explain answers.
Suppose the economy is self-regulating, the price level is 132, the quantity demanded of Real GDP is 4 trillion, the quantity supplied of Real GDP in the short run is 3.9 trillion, and the quantity supplied of Real GDP in the long run is 4.3 trillion. Is the economy in short-run equilibrium? Will the price level in long-run equilibrium be greater than, less than, or equal to 132? Show the relevant graph and explain answers.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter9: Classical Macroeconomics And The Self Regulating Economy
Section: Chapter Questions
Problem 14QP
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Question
. Suppose the economy is self-regulating, the
quantity supplied of Real GDP in the long run is 4.3 trillion. Is the economy in short-run
equilibrium? Will the price level in long-run equilibrium be greater than, less than, or equal to
132?
Show the relevant graph and
explain answers.
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