(Answered) Draw an adsraslras graph that depicts an economy in an

Economics

Draw an AD/SRAS/LRAS graph that depicts an economy in an inflationary gap (we are not starting in initial equilibrium but in an inflationary gap). Label the vertical and horizontal axes appropriately. Clearly identify the original price and real GDP level. Shift the appropriate curve(s) to demonstrate what happens to the aggregate price level and real GDP when the economy is allowed to self-correct in the long run. Explain why you have shifted the curve you did and how this brings the economy back to long run equilibrium

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Macroeconomics, Economics

Category:- Macroeconomics
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