Based on the figure, the economy is initially in long-run equilibrium at point A If there is a favorable supply shock that increases potential output and shifts the long-run aggregate supply curve from LRAS to LRAS', then there is initially _____ gap and the short-run aggregate supply curve will _____.
Definitions:
Losses
The negative financial result from business activities when costs exceed revenues.
Market Message
A communication or signal sent through the movement in prices, volumes, or other market indicators that reflects the collective actions and sentiments of market participants.
Entrepreneurial Process
A sequence of steps starting from ideation to the creation and management of a new business venture.
Competitive Market Economy
An economic system where a large number of buyers and sellers interact, resulting in the efficient allocation of resources through competitive pricing.
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