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 P5. 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 6 options: P5, Q3. P4, Q4. P3, Q3. P3, Q5. P4, Q2.

Answer 1

P3 and Q3

The intersection of AD curve and the long-run aggregate supply curve determines the equilibrium real GDP and price level in the long run.This happens at P3 and Q3.

Step-by-step explanation:

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 P5.

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 6 options: P5, Q3. P4, Q4. P3, Q3. P3, Q5. P4, Q2.

P3 and Q3

The intersection of AD curve and the long-run aggregate supply curve determines the equilibrium real GDP and price level in the long run.This happens at P3 and Q3.