AP Macroeconomics Mod 2 H Explain Using Graphs As Appropriate the Response of Output Employment and the Price Level to an Aggregate Demand or Aggregate Questions

Analyse how aggregate-demand and short-run aggregate-supply shocks change real output, employment, unemployment, and the price level.

Exam points

shift AD right or left and label the same-direction changes in short-run output Y and price level PL
connect an AD-driven output rise to higher employment and lower unemployment, or reverse the chain
shift SRAS right or left and label the opposite-direction changes in output and price level
distinguish demand-pull inflation from cost-push inflation and stagflation by the curve that shifts
infer an AD or SRAS shock from observed combinations of output, price-level and unemployment changes

[Maximum number: 1]

Assume that Nepal is in long-run macroeconomic equilibrium and has an open economy.

Nepal and Thailand are trading partners. Assume that Thailand experiences an increase in real income. On your graph in part A, show the short-run effect of the increase in real income in Thailand on real output and the price level in Nepal, labeling the new short-run equilibrium real output $\mathrm{Y}_{2}$ and the new short-run equilibrium price level $\mathrm{PL}_{2}$ .

On the graph from part A, show the short-run effect of the increase in real income in Thailand as a rightward shift of Nepal's aggregate demand curve, resulting in an increase in real output, labeled $\mathrm{Y}_{2}$ , and an increase in the price level, labeled $\mathrm{PL}_{2}$ .

Figure for Answer to Question AP Macroeconomics Mod 2 H Explain Using Graphs As Appropriate the Response of Output Employment and the Price Level to an Aggregate Demand or Aggregate Questions question 1 — AP Macroeconomics

All question bank results loaded

AP Macroeconomics Mod 2 H Explain Using Graphs As Appropriate the Response of Output Employment and the Price Level to an Aggregate Demand or Aggregate Questions question 1