Illustrate the long turn and short turn effect

Reference no: EM131443612

Question: Use the accompanying diagram to answer questions a and b.

1790_Real GDP.png

a. On the exhibit provided, illustrate the short-run effects of a decrease in aggregate demand. What happens to the price level, real output, employment, and unemployment?

b. On the exhibit provided, illustrate the long-run effects of a decrease in aggregate demand. What happens to the price level, real output, employment, and unemployment?

Reference no: EM131443612

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