The following graph represents the short-run aggregate supply curve (SRAS) based on an expected price level of 180. The economy's full- employment output level is $9 trillion. Major unions across the country have recently negotiated three-year wage contracts with employers. The wage contracts are based on an expected price level of 180, but the actual price level turns out to be 240. Show the short-run effect of the unexpectedly high price level by dragging the curve or moving the point to the appropriate position. 300 8 PRICE LEVEL (CPI) 8 8 SRAS(180 REAL GDP (Trillions of dollars) 15 SRAS(180)
The following graph represents the short-run aggregate supply curve (SRAS) based on an expected price level of 180. The economy's full- employment output level is $9 trillion. Major unions across the country have recently negotiated three-year wage contracts with employers. The wage contracts are based on an expected price level of 180, but the actual price level turns out to be 240. Show the short-run effect of the unexpectedly high price level by dragging the curve or moving the point to the appropriate position. 300 8 PRICE LEVEL (CPI) 8 8 SRAS(180 REAL GDP (Trillions of dollars) 15 SRAS(180)
Chapter14: Aggregate Demand And Supply
Section: Chapter Questions
Problem 9SQP
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