Table 7-1
Table 7-1 shows the aggregate demand and short-run aggregate supply curves for an economy. The potential level of output is $7.6 trillion.
-Refer to Table 7-1. If policymakers adopt a nonintervention policy, the economy gap
A) would return to potential output at a price level of 2.8.
B) would return to potential output at a price level of 1.2.
C) would return to potential output at a price level of 2.0.
D) would return to long-run equilibrium at an output level of $6 trillion.
Correct Answer:
Verified
Q144: Table 7-1 Q145: The aggregate demand curve shifts due to Q146: Public policy to eliminate inflationary or recessionary Q147: The potential level of real GDP is Q150: In the short run, all prices are Q152: In the long run, real output can Q153: The long-run aggregate supply curve is vertical Q157: The long run in macroeconomics is a Q158: The short-run aggregate supply curve is vertical Q159: Taking no action and allowing an economy
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