Consider an economy initially at long-run equilibrium with output (Y)equal to potential output (Y*).If the SRAS is positively sloped,then a shift to the left of the AD curve will lead to ___________ in the price level,in the short run.In the long run,the SRAS curve will shift to the ___________ and the equilibrium will be at __________.

Question

Quizplus · Accepted Answer

In the short run, a shift to the left of the AD curve will lead to a decrease in the price level. In the long run, the SRAS curve will shift to the right and the equilibrium will be at Y = Y*.

Consider an Economy Initially at Long-Run Equilibrium with Output (Y)equal