SEARCH
You are in browse mode. You must login to use MEMORY

   Log in to start


From course:

Economics A Level (DONEEEEEEE)

» Start this Course
(Practice similar questions for free)
Question:

AD and SRAS Diagram -AD Shifts to the Right. Explain what has Happened and will happen?

Author: eric_galvao



Answer:

-When AD Increases to AD2, a New Equilibrium will be setup at a higher Real GDP and Price Level -More Output then means more Labour [Derived Demand] leading to less Inflation -But the Higher Prices means that 'Demand-pull Inflation' has Occurred -The Opposite [AD Falling] is True [Unemployment Up, Output down, but Inflation down]


0 / 5  (0 ratings)


-When AD Increases to AD2, a New Equilibrium will be setup at a higher Real GDP and Price Level
-More Output then means more Labour [Derived Demand] leading to less Inflation
-But the Higher Prices means that 'Demand-pull Inflation' has Occurred
-The Opposite [AD Falling] is True [Unemployment Up, Output down, but Inflation down]
1 answer(s) in total