In a new initiative to promote exercise, the Australian government spends a lot of money building and renovating parks around the country. The economy was initially in long-run equilibrium. In the short run, the aggregate demand curve shifts right. In the long run the price level decreases, output returns to its potential, and real wages increase. In the short run, the aggregate demand curve shifts right. In the long run, the price level increases, the output returns to its potential, and real wages increase. In the short run, the aggregate demand curve shifts right. In the long run, the price level increases, output returns to its potential, and real wages do not change.

In a new initiative to promote exercise, the Australian government spends a lot of money building and renovating parks around the country. The economy was initially in long-run equilibrium. In the short run, the aggregate demand curve shifts right. In the long run the price level decreases, output returns to its potential, and real wages increase. In the short run, the aggregate demand curve shifts right. In the long run, the price level increases, the output returns to its potential, and real wages increase. In the short run, the aggregate demand curve shifts right. In the long run, the price level increases, output returns to its potential, and real wages do not change.

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

ChapterST4: Keynes And Hayek: Contrasting Views On Sound Economics And The Role Of Government

Section: Chapter Questions

Problem 1CQ

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