Suppose equilibrium output is and the price level is for an aggregate demand curve and a classical aggregate supply curve. A technological advance will result in
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JNU SIS 2012 Question 19: AD-AS model
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Suppose equilibrium output is Y₀ and the price level is P₀ for an aggregate demand curve and a classical aggregate supply curve. A technological advance will result in (A) an increase in the price level and no change in the equilibrium level of output (B) an increase in the equilibrium level of output and the price level (C) an increase in the equilibrium level of output and a decrease in the price level (D) an increase in the equilibrium level of output and no change in the price level
Also written as: Suppose equilibrium output is Y_0 and the price level is P_0 for an aggregate demand curve and a classical aggregate supply curve. A technological advance will result in
AD-AS model has come up 59 times in 7 exams since 2004.
What this question tests
This question is on AD-AS equilibrium and shocks, part of AD-AS model in Macroeconomics.
How demand and supply shocks move output and the price level.
TestStop has 11 past-paper questions on this subtopic.
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