Based on Your Understanding of the AS- AD Model and the IS-

question 12

Essay

Based on your understanding of the AS- AD model and the IS- LM model, graphically illustrate and explain what effect a decrease in the price target will have on the economy. In your graphs, clearly illustrate the short- run and medium- run equilibria.

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Definitions:

Levels of Alertness

The varying degrees of cognitive awareness and responsiveness to the environment, ranging from high alertness to drowsiness.

Emotional Regulation

The ability to manage and respond to an emotional experience in an adaptive and appropriate manner.

Coordinating Movements

The process of using different parts of the body together smoothly and efficiently.

Sensory Information

Data received by the sensory organs (e.g., eyes, ears, skin, nose, tongue) that is then processed by the brain to form perceptions of the environment.