lowing figure depicts the aggregate demand curve AD and the long run aggregate supply curve LRAS for the United States The

Question

lowing figure depicts the aggregate demand curve AD and the long run aggregate supply curve LRAS for the United States The economy is initially at long run equilibrium at point A In 2015 Mexico was the second largest importer of goods produced in the United States importing approximately 236 billion in goods Now suppose that Mexico experiences a substantial economic boom in 2016 that greatly increases Mexico s demand for U S made products In the figure below first shift the appropriate curve to depict the change in the U S economy that is due to the economic boom in Mexico According to classical economics the economy will self correct Now using your knowledge of classical economics move the equilibrium point to depict the self correction of the economy To refer to the graphing tutorial for this question type please click here COO Price Level P LRASI O

Kunduz · Accepted Answer

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