Question 14 4 pts If our macroeconomic equilibrium is beyond potential GDP, what

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Question 14 4 pts If our macroeconomic equilibrium is beyond potential GDP, what will happen in the economy if no policy is undertaken by the Fed or government? O SRAS will shift left, we will move back, GDP will remain the same, and prices will increase. O SRAS will shift right, we will move to a new macroeconomic equilibrium with increased GDP and lower prices. SRAS will shift right, we will move to a new macroeconomic equilibrium with increased GDP and lower prices SRAS will stay the same, and GDP and prices will be sustainable. O SRAS will shift left, we will move back to LRAS-SRAs-AD with higher prices and lower GDP.

Explanation / Answer

If our macroeconomic equilibriumis beyond potential GDP, Then, SRAS will shift right , we will move to a new macroeconomic equilibrum with increased GDP and lower prices in the economy if no policy is undertaken by the government.

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