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#1 Suppose are in an open economy with a negatively sloped AD curve, a positively sloped SRAS
curve, and an economy currently operating at the long run equilibrium. Explain how each of the
following would affect (a) the short run and (b) the long run equilibrium values of both P and Y.(b)
An exogenously caused increase in the marginal propensity to save.

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1 Suppose are in an open economy with a negatively sloped A.pdf

  • 1. #1 Suppose are in an open economy with a negatively sloped AD curve, a positively sloped SRAS curve, and an economy currently operating at the long run equilibrium. Explain how each of the following would affect (a) the short run and (b) the long run equilibrium values of both P and Y.(b) An exogenously caused increase in the marginal propensity to save.