How will an increase in aggregate demand most likely affect the economy in the long run? Because output is above full-employment level of output, unemployment is below the natural rate of unemployment. The nominal wage will be pushed upward thus increasing the cost of production and aggregate supply decreases. Real GDP returns to full employment and the price level decrease. Because output is below full-employment level of output, unemployment is above the natural rate of unemployment. The nominal wage will be pushed downwards thus reducing the cost of production and aggregate supply increases. Real GDP returns to full employment and the price level increase. Because output is above full-employment level of output, unemployment is below the natural rate of unemployment. The nominal wage will be pushed upward thus increasing the cost of production and aggregate supply decreases. Real GDP returns to full employment and the price level increases Because output is above full-employment level of output, unemployment is below the natural rate of unemployment. The nominal wage will be pushed downwards thus reducing the cost of production and aggregate supply increases. Real GDP returns to full employment and the price level decreases.
How will an increase in aggregate demand most likely affect the economy in the long run? Because output is above full-employment level of output, unemployment is below the natural rate of unemployment. The nominal wage will be pushed upward thus increasing the cost of production and aggregate supply decreases. Real GDP returns to full employment and the price level decrease. Because output is below full-employment level of output, unemployment is above the natural rate of unemployment. The nominal wage will be pushed downwards thus reducing the cost of production and aggregate supply increases. Real GDP returns to full employment and the price level increase. Because output is above full-employment level of output, unemployment is below the natural rate of unemployment. The nominal wage will be pushed upward thus increasing the cost of production and aggregate supply decreases. Real GDP returns to full employment and the price level increases Because output is above full-employment level of output, unemployment is below the natural rate of unemployment. The nominal wage will be pushed downwards thus reducing the cost of production and aggregate supply increases. Real GDP returns to full employment and the price level decreases.
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter10: Dynamic Change, Economic Fluctuations, And The Ad-as Model
Section: Chapter Questions
Problem 12CQ
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Transcribed Image Text:How will an increase in aggregate demand most likely affect the economy in the long
run?
Because output is above full-employment level of output, unemployment is
below the natural rate of unemployment. The nominal wage will be pushed
upward thus increasing the cost of production and aggregate supply decreases.
Real GDP returns to full employment and the price level decrease.
Because output is below full-employment level of output, unemployment is
above the natural rate of unemployment. The nominal wage will be pushed
downwards thus reducing the cost of production and aggregate supply increases.
Real GDP returns to full employment and the price level increase.
Because output is above full-employment level of output, unemployment is below the natural
rate of unemployment. The nominal wage will be pushed upward thus increasing the cost of
production and aggregate supply decreases. Real GDP returns to full employment and the
price level increases
Because output is above full-employment level of output, unemployment is
below the natural rate of unemployment. The nominal wage will be pushed
downwards thus reducing the cost of production and aggregate supply increases.
Real GDP returns to full employment and the price level decreases.
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