Starting from short-run equilibrium, graphically illustrate and explain what happens to RGDP, the average price level,...

Starting from short-run equilibrium, graphically illustrate and explain what happens to RGDP, the average price level, and unemployment if consumer confidence decreases and the cost of domestic resources rises.

Starting from long-run equilibrium, graphically illustrate and explain what happens to RGDP, the average price level, and unemployment if the cost of labor decreases and business expectations decline.

The following follow-up questions are based on your conclusions #2

Follow-up: Is the economy at the natural rate of unemployment? Explain.

Follow-up: How would you describe the current state of the economy?

Follow-up: What types of unemployment exist at the current state of economy?

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

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