Exhibit 10.8

-Refer to Exhibit 10.8, which shows the long-run equilibrium in an aggregate demand-aggregate supply model. The change in real GDP in this exhibit from Y₁ to Y₂ could have been caused by _____

Question

Exhibit 10.8
 
-Refer to Exhibit 10.8, which shows the long-run equilibrium in an aggregate demand-aggregate supply model. The change in real GDP in this exhibit from Y₁ to Y₂ could have been caused by _____

Quizplus · Accepted Answer

The change in real GDP from Y₁ to Y₂ in Exhibit 10.8 could have been caused by an increase in labor productivity, which would shift the aggregate supply curve from AS₁ to AS₂. The other options, such as government policy aimed at increasing demand (A), weather conditions leading to crop failures (B), a resource monopoly (C), or changes in taxation or government spending (D), would affect aggregate demand and shift the AD curve rather than the AS curve.

Exhibit 10.8 -Refer to Exhibit 10.8, Which Shows the Long-Run Equilibrium in the Long-Run