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Starting in long-run equilibrium when the aggregate demand curve is AD0 and the short-run aggregate supply curve is SRAS0, if there is a supply shock, such as a drastic increase in the price of oil, this will cause____ and a movement to a short-run equilibrium at point___
If aggregate demand increases at every price level than the demand curve shifts to the right In the short-run the new equilibrium forms from an increase in willingness to spend, thus higher .
Study 52 Aggregate Demand & Supply / CH 13 flashcards from Donna R on StudyBlue , How do increases in spending on the war in Afghanistan affect the aggregate demand curve? , a decrease in the price level has no effect on the aggregate quantity of GDP supplied
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Spending on the war in Afghanistan is essentially categorized as government purchas How do increases in spending on the war in Afghanistan affect the aggregate demand curve? A) They will move the economy down along a stationary aggregate demand curve B) The will move the economy up along a stationary aggregate demand curve
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Figure 221 Aggregate Demand An aggregate demand curve (AD) shows the relationship between the total quantity of output demanded (measured as real GDP) and the price level (measured as the implicit price deflator)At each price level, the total quantity of goods and services demanded is the sum of the components of real GDP, as shown in the table