Enable text based alternatives for graph display and drawing entry

Try Another Version of These Questions

Question 1

The graph below shows the AD-AS diagram for Norway.

Suppose that the economy is initially in long-run equilibrium with the price level of 700.

Now suppose that the Aggregate Demand (AD) curve shifts right from AD1 (blue) to AD2 (green).

What is the new GDP in the short-run as a result of this shift?

 

Hint


Question 2

What is the new price level in the short-run as a result of this shift?

 

Hint


Question 3

What is the price level in the new long-run equilibrium as a result of this shift?

 

Hint


Question 4

What is GDP in the new long-run equilibrium as a result of this shift?

 

Hint


Question 5

What causes the economy to move from the short-run equilibrium to the new long-run equilibrium?

 

Hint