The following graph shows the economy in long-run equilibrium at the expected price level of 120
and the natural level of output of s600 bilion. Suppose the qovernment increases spending on
bulding and repairing highways, bridges, and ports, Shit the short-run aggregate-supply (AS) curve
or the short-run aggregate-demand (AD) curve to show the short-run impact of the increase in
government spending.In the short run, the increase in government spending on infrastructure
causes the price level to the price level people oxpected and the quantity of output to the natural
level of output. The increase in government spending will cause the unemployment rate to the
natural level of unemployment in the short run. Again, the following graph shows the economy in
long-run equilibrium at the expected price level of 120 and the natural level of output of s6oo
bililan, before the increase in government spending on infrastructure. During the transition from the
short run to the lonig run, price-level expectations will and the short-run curve will shift to the Wow
show the long-run impact of the increase in government spending by shifing both the short-run
aggregate-demand (AD) curve and the shortrun oggregate-supply (AS) curve to the appropriate
positions.Now show the long-run impact of the increase in government spending by shifting both
the short-run aggregate-demand (AD) curve and the shortrun aggregate-supply (AS) curve to the
appropriate positions. In the long run, as a result of the increase in government spending, the price
level the natural level of output, and the unempioyment rate the natural level of unemployment..
The following graph shows the economy in longrun equilibriu.pdf
1. The following graph shows the economy in long-run equilibrium at the expected price level of 120
and the natural level of output of s600 bilion. Suppose the qovernment increases spending on
bulding and repairing highways, bridges, and ports, Shit the short-run aggregate-supply (AS) curve
or the short-run aggregate-demand (AD) curve to show the short-run impact of the increase in
government spending.In the short run, the increase in government spending on infrastructure
causes the price level to the price level people oxpected and the quantity of output to the natural
level of output. The increase in government spending will cause the unemployment rate to the
natural level of unemployment in the short run. Again, the following graph shows the economy in
long-run equilibrium at the expected price level of 120 and the natural level of output of s6oo
bililan, before the increase in government spending on infrastructure. During the transition from the
short run to the lonig run, price-level expectations will and the short-run curve will shift to the Wow
show the long-run impact of the increase in government spending by shifing both the short-run
aggregate-demand (AD) curve and the shortrun oggregate-supply (AS) curve to the appropriate
positions.Now show the long-run impact of the increase in government spending by shifting both
the short-run aggregate-demand (AD) curve and the shortrun aggregate-supply (AS) curve to the
appropriate positions. In the long run, as a result of the increase in government spending, the price
level the natural level of output, and the unempioyment rate the natural level of unemployment.
