Exhibit 9-4

-Refer to Exhibit 9-4.Assume the economy is self-regulating and currently is in long-run equilibrium with the price level equal to P₂.If something happens that shifts the AD curve to the AD₁ position,the economy will eventually settle down at a long-run equilibrium point of __________.

Question

Exhibit 9-4

-Refer to Exhibit 9-4.Assume the economy is self-regulating and currently is in long-run equilibrium with the price level equal to P₂.If something happens that shifts the AD curve to the AD₁ position,the economy will eventually settle down at a long-run equilibrium point of __________.

Quizplus · Accepted Answer

In a self-regulating economy, if the AD curve shifts to AD₁, the economy will adjust back to its natural level of output, Q₃, at a new price level, P₃, in the long run.

Exhibit 9-4 -Refer to Exhibit 9-4.Assume the Economy Is Self-Regulating and Currently