History Bookmarks Window Help courses.apla.com LRAS) for a hypothetical economy.

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History Bookmarks Window Help courses.apla.com LRAS) for a hypothetical economy. Initially, the expected price level is equal to the actuali price level, and the economy is in long-run equilibrium at ts natural level of output, $100 billion Suppose war in the world's main oil-producing region sharply reduces the worid ofl supply, causing oil prices to rise and increasing the costs of producing goods and services in this econonny Use the graph to help you answer the questions about the short-run and long-run effects of the increase in production costs that follow. (Note:You w not be graded on any adjustments made to the graph.) Hint: For simplicity, ignore any possible impact of the higher oil prices on the natural level of output. 17 MacBook A 80 5 7 8 9

Explanation / Answer

Will be 100 billions of dollars. The reason is demand will also shift downward due to higher prices and meet new supply at initial level of output. The potential gdp remains same

Many answers can be given to first objectives. Please mention the choices given in the question so that I can answer accurately. Will give prompt reply

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