Economics A Level: Lets say at Price P, it creates a Y of Real GDP
-The AD Curve shifts to the Right. What happens now?

Question

Lets say at Price P, it creates a Y of Real GDP
-The AD Curve shifts to the Right. What happens now?

go kys · Accepted Answer

-At the Price P, it will mean that there will be More Output Produced due to the AD shifting to the Right [Y2]
-But also, the Y will be, on the New AD Curve, be at a higher Price Level so a Given Amount of Output will have a Higher Price [Inflation..]

Economics A Level

Lets say at Price P, it creates a Y of Real GDP -The AD Curve shifts to the Right. What happens now?

-At the Price P, it will mean that there will be More Output Produced due to the AD shifting to the Right [Y2] -But also, the Y will be, on the New AD Curve, be at a higher Price Level so a Given Amount of Output will have a Higher Price [Inflation..]

Author