- According to the model of the macro economy in Figure 18.3,a shift from LRAS₁ to LRAS₂ will cause,ceteris paribus, A)A decrease in the level of output. B)A decrease in the price level. C)An increase in the unemployment level.

Question

Quizplus · Accepted Answer

A rightward shift from LRAS1 to LRAS2 indicates an increase in the economy's potential output, leading to a decrease in the price level, assuming aggregate demand remains constant.

- According to the Model of the Macro Economy in Figure