SEARCH
You are in browse mode. You must login to use MEMORY

   Log in to start


From course:

Economics A Level

» Start this Course
(Practice similar questions for free)
Question:

AD and LRAS Diagram -AD Shifts to the Right. Explain what has Happened and will happen?

Author: go kys



Answer:

-AD2 will have the Same Equilibrium Point at the Same Output of the Old Equilibrium ,but just at a Higher Price -This is because the LRAS is the Maximum Output the Economy can Produce. So all that happens is Demand Pull Inflation occurs -Unemployment also doesn't Exist since being on the LRAS means there is no Spare Capacity in the Economy


0 / 5  (0 ratings)


-AD2 will have the Same Equilibrium Point at the Same Output of the Old Equilibrium ,but just at a Higher Price
-This is because the LRAS is the Maximum Output the Economy can Produce. So all that happens is Demand Pull Inflation occurs
-Unemployment also doesn't Exist since being on the LRAS means there is no Spare Capacity in the Economy
1 answer(s) in total

Author

go kys
go kys