Suppose that the economy is depicted in the graph.
Suppose that the economy is depicted in the graph.
a. The current equilibrium price level and output level respectively are: 80 and $9 trillion.
b. Using the line drawing tool, show a change in aggregate demand that leads to an inflationary gap. Use the line drawing tool and label this new line ’AD1‘.
Carefully follow the instructions above, and only draw the required objects.
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