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lizsmith lizsmith
wrote...
Posts: 486
4 years ago
Suppose that the economy is above the full employment level of output. Describe the adjustment process of returning this economy to full employment.
Textbook 
Macroeconomics: Principles, Applications and Tools

Macroeconomics: Principles, Applications and Tools


Edition: 7th
Authors:
Read 62 times
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wrote...
4 years ago
Being above full employment will lead to upward pressure on wages and prices. The short-run aggregate supply curve continues to shift up, as prices increase and output falls along the aggregate demand curve, until the economy reaches its long-run equilibrium where the aggregate demand curve intersects the long-run aggregate supply curve at the full employment level of output.
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