(Answered) Draw an aggregate demand-aggregate supply graph and

Management Studies

Draw an Aggregate Demand-Aggregate Supply graph and indicate the long-run equilibrium.

a) Suppose now that the price of energy unexpectedly goes down. What happens to the SRAS curve? Show your answer on your graph and explain it in words.

b) What happens to output and unemployment when the price of energy unexpectedly goes down? Use your graph and words to explain your answer.

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