Use the graph on the right to answer the following questions LRAS SRAS a. Which

Question

Use the graph on the right to answer the following questions LRAS SRAS a. Which of points A, B, C, or D can represent a long-run equilibrium? O A and C O A, B, C, and D SRAS2 O A and B O B and D b. Suppose that initially the economy is at point A. Then aggregate demand increases from AD, to AD2 The new short-run equilibrium will be at port- The long-run equilibrium point wil be at point AD Real GDP (trillions of 2009 dollars) Which of the following best explains how the economy will adjust from the short-run equilibrium point to the new long-run equilibrium point? A. Due to the recession, workers and firms will be willing to

Explanation / Answer

A and C can represent long run equilibrium

Short run at D and long run at c

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