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(4) no change in output and a decrease in prices.
Question 43
Figure 10-18
As shown in Figure 10-18, the economy’s point of short-run equilibrium, given by the shift of the aggregate demand curve from to , is
(1) .
(2)
(3) .
(4) unable to be determined.

Ask by Luna Deleon. in Cayman Islands
Mar 31,2025

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The economy’s short-run equilibrium point after the shift is .

Solución

To determine the point of short-run equilibrium in the economy after the shift of the aggregate demand curve from to as shown in Figure 10-18, we need to identify the point where the aggregate demand curve intersects the short-run aggregate supply curve.
Given that there is no change in output and a decrease in prices, we can infer that the short-run aggregate supply curve shifts to the right, indicating an increase in the quantity supplied at each price level.
The point of short-run equilibrium is where the aggregate demand curve intersects the short-run aggregate supply curve.
Therefore, the correct answer is (3) .

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Mind Expander

The scenario you’ve described reflects the classic economic principle of demand shock where demand shifts impact equilibrium. In a short-run equilibrium, the corresponding point, such as , indicates where the new aggregate demand intersects with the short-run aggregate supply curve, potentially leading to price adjustments while output remains constant.
For a deeper understanding, remember that shifts in aggregate demand can result from various factors like consumer confidence, fiscal policies, or external events. Keeping an eye on these influences is crucial for economists and businesses alike since they dictate both growth and inflation trends, shaping strategic decisions in policy and market movements.

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