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From course:

Economics A Level (DONEEEEEEE)

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Question:

How can a Shift in the AS [With a Macroeconomic Equilibrium Diagram] to the Right affect all 4 Macroeconomic Performance Positively? -Is the Opposite True?

Author: eric_galvao



Answer:

-If the AS increases from SRAS to SRAS1 then: -The Economy will Grow to the New Output [Y1] -The new Output means more Employment [Derived Demand] -Prices also will Fall so Inflation becomes Lower -Economy becomes more Competitive [From Prices falling] so Exports can Increase -The Opposite is True. SRAS going Left will Worsen all 4


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-If the AS increases from SRAS to SRAS1 then:
-The Economy will Grow to the New Output [Y1] 
-The new Output means more Employment [Derived Demand]
-Prices also will Fall so Inflation becomes Lower
-Economy becomes more Competitive [From Prices falling] so Exports can Increase
-The Opposite is True. SRAS going Left will Worsen all 4
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