Explain and graph how the economy can fix itself

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Reference no: EM13151931

Suppose the economy is self-regulating, the price level is 110, the quantity demanded of Real GDP is $4 trillion, the quantity supplied of Real GDP in the short run is $4.9 trillion, and the quantity supplied of Real GDP in the long run is $4.1 trillion. Graph and label this situation. Is the economy in short-run equilibrium? Explain and graph how the economy can “fix itself” and move to the long run equilibrium? Will the price level at the long-run equilibrium be greater than, less than, or equal to 110?

Reference no: EM13151931

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