Please Help Refer to the above figures. As the economy moves from the very short
ID: 1101701 • Letter: P
Question
Please Help
Refer to the above figures. As the economy moves from the very short run to the longer run, we would expect: the representation of the economy to move from Figure A to Figure B. the representation of the economy to move from Figure B to Figure A. demand shocks to be eliminated. the economy to gravitate to P1. Refer to the above figures. In terms of representing the economy: Neither Figure A nor Figure B consistently represent either the very short run or longer run. Demand shocks affect levels of output and employment in Figure A: demand shocks have no effect in Figure B. Figure A represents the very short run, where output is fixed, and Figure B represents the longer run. Figure B represents the very short run, where prices are sticky, and Figure A represents the longer run. Refer to the above figures. If government policy can be used to affect the level of demand in the economy, these figures suggest that government policy: can affect the level of output in the very short run, when prices are stuck. can affect the level of output in the longer run, when prices are flexible. cannot affect output in either the very short run or longer run. can be used to simultaneously affect the levels of output and prices.Explanation / Answer
The representation of economy to move from figure B to figure A Figure B represents the very short run, where prices are sticky and Figure A represents the long run can affect the level of output in the very short run, when prices are stuck