The accompanying graph illustrates an economy in long-run equilibrium which is denoted by point ELR. Suppose a new technology is discovered which increases productivity. In the graph, demonstrate how the economy moves to its new long-run equilibrium by shifting the appropriate curves and placing point ELR at the new long-run equilibrium. In the long run, the aggregate price level increases. decreases. does not change. and real GDP (aggregate output) increases. decreases. does not change.
The accompanying graph illustrates an economy in long-run equilibrium which is denoted by point ELR. Suppose a new technology is discovered which increases productivity. In the graph, demonstrate how the economy moves to its new long-run equilibrium by shifting the appropriate curves and placing point ELR at the new long-run equilibrium. In the long run, the aggregate price level increases. decreases. does not change. and real GDP (aggregate output) increases. decreases. does not change.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter17: Production And Growth
Section: Chapter Questions
Problem 5CQQ
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The accompanying graph illustrates an economy in long-run equilibrium which is denoted by point ELR.
Suppose a new technology is discovered which increases productivity. In the graph, demonstrate how the economy moves to its new long-run equilibrium by shifting the appropriate curves and placing point ELR at the new long-run equilibrium.
In the long run, the aggregate price level
- increases.
- decreases.
- does not change.
and real
- increases.
- decreases.
- does not change.
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