Please explain the effects on the price level and the real GDP graphically using the
aggregating demand and supply analysis (i.e. AD-AS framework) for the following
changes in conditions.
Spending on national defense doubles.(10%)
Please explain the effects on the price level and the real GDP graphically using the
aggregating demand and supply analysis (i.e. AD-AS framework) for the following
changes in conditions.
The costs of imported goods increase. (10%)
Please explain the effects on the price level and the real GDP graphically using the
aggregating demand and supply analysis (i.e. AD-AS framework) for the following
changes in conditions.
An improvement in technology raises labor productivity. (5%)
Why the long-run aggregate supply (LRAS) curve is vertical at full-employment real
GDP? Please explain the analysis using the self-correcting AD-AS model. (25%)
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