The AD-AS model predicts that a negative AD shock will cause the price level to ___________ from the initial to a new long-run equilibrium level.But the model is silent about how fast the price level will ___________ from the initial to the new level;the model cannot explain ___________.
A) decrease;decrease;the inflation rate
B) decrease;decrease;the price level
C) increase;increase;the inflation rate
D) decrease;decrease;stagflation
E) increase;increase;the price level
Correct Answer:
Verified
Q115: The Phillips curve is a statistical relationship
Q116: Consider an economy initially at long-run equilibrium
Q117: Experience has shown that,during recessions,the _ falls
Q118: A model that can directly explain what
Q119: An SRAS curve would be _ if
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents