Exhibit 10.6

-Refer to Exhibit 10.6 which shows the equilibrium price level and real GDP in an aggregate demand-aggregate supply model. Which of the following economic changes is depicted by a movement from point e to point e'?

Question

Exhibit 10.6
 
-Refer to Exhibit 10.6 which shows the equilibrium price level and real GDP in an aggregate demand-aggregate supply model. Which of the following economic changes is depicted by a movement from point e to point e'?

Quizplus · Accepted Answer

A movement from point e to point e' represents a decrease in short-run aggregate supply, as it leads to an increase in price level (inflation) and a decrease in real GDP.

Exhibit 10.6 -Refer to Exhibit 10.6 Which Shows the Equilibrium Price Level