Advanced Placement (AP), 07.01.2021 01:00 mollykay2001p3qo0j
The economy of country X is at full employment.
a) Draw a correctly labeled graph of the long run aggregate supply, short run aggregate supply, and aggregate demand curves, and show each of the following
(i) current price level, Labeled PL1
(ii) current real output, labeled Y1
(b) assume that household income increases as a result of recent economic prosperity and country x. On your graph (a), show the effect of the increase in household income on real output and price level.
(C) what will be the effect of the change identified in part (b) on unemployment in Country x?
(D) Will the change in real output shown in part (b) be smaller or larger in the presence of automatic stabilizers? Explain.
Answers: 1
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The economy of country X is at full employment.
a) Draw a correctly labeled graph of the long run...
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