Please refer to the following graph representing a hypothetical macro economy. Assume that the Aggregate Demand curve has recently changed from AD1 to AD2. During that change, which phase of the business cycle was this economy in? @ LRAS SRAS

Please refer to the following graph representing a hypothetical macro economy. Assume that the Aggregate Demand curve has recently changed from AD1 to AD2. During that change, which phase of the business cycle was this economy in? @ LRAS SRAS

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Aggregate Demand And Aggregate Supply

Section23.2: Explaining Short·run Economic Fluctuations

Problem 2QQ

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Question

Please refer to the following graph representing a hypothetical macro economy. Assume that the Aggregate Demand curve has recently changed from AD1 to AD2. During that change,
which phase of the business cycle was this economy in?
Price Level
O Expansion
O Recession
O Recovery
O Inflation
LRAS
AD2
SRAS
AD1
Real GDP

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