Starting from Long-Run Equilibrium,draw an Aggregate Demand-Aggregate Supply Graph to Illustrate

question 106

Essay

Starting from long-run equilibrium,draw an aggregate demand-aggregate supply graph to illustrate the difference between a long-run and a short-run equilibrium due to an increase in aggregate demand.Once the economy is in the short-run equilibrium,explain-but it's not necessary to illustrate-how long-run equilibrium will be restored.

---

Definitions:

Observations

The action or process of closely observing or monitoring something or someone.

Hypotheses

Proposed explanations for a phenomenon, meant to be tested through experimentation or observation.

Instruments

Tools or devices designed for a specific purpose, especially scientific or musical.

Independent Variable

The factor in a controlled experiment that is being manipulated.