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    Long-Run Equilibrium Price Level

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    Consider the situation:

    A country's long-run equilibrium price level has increased, but the position of its aggregate demand schedule has changed.

    You need to answer the following questions:
    ?What has led to the country's increase in the long-run equilibrium price level and the change in the position of its aggregate demand schedule?
    ?What specific factors might have accounted for this event?
    Explain by giving reasons.

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    https://brainmass.com/economics/general-equilibrium/long-run-equilibrium-price-level-161654

    Solution Preview

    In the AD-AS model if the AD curve shifts to the right this will cause a higher equilibrium price level. There are several things that can shift the AD curve. 1) expansionary monetary policy: if the Fed lowers rates then people spend more so consumption and ...

    Solution Summary

    Long-Run Equilibrium Price Level is considered.

    $2.19