Mapoob Map o sapling learning Suppose the equilibrium level of the gross domesti

Question

Mapoob Map o sapling learning Suppose the equilibrium level of the gross domestic product (GDP) is beyond potential output caused by an increase in aggregate demand (AD). Using neoclassical economics, rank the following statements beginning with the increase in AD and ending with the neoclassical explanation of how the economy returns to potential output Recall that AS stands for the aggregate supply curve. AD increases. Economy returns to potential output. The shortage of workers drives wages up. The short run AS curve shifts to the left. The intersection of the AD and short run AS curves is at full employment. There are more jobs available than unemployed people.

Explanation / Answer

There are more jobs available than unemployed people.
The shortage of workers drives wages up.
The short run AS curve shifts the left
The intersection of the Ad and the short run AS curves is at full employment.

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