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The following graph shows an aggregate demand (AD) curve and a short-run aggregate supply
(SRAS ) curve for an economy. Suppose that the economy is initially in a short-run equilibrium:
at P E , and Real GDP is 20 trillion. Suppose that at some point, the price increases to P . At P ,
there is of trillion goods. As a result, the price level , firms output, and consumers consumption.

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  • 1. The following graph shows an aggregate demand (AD) curve and a short-run aggregate supply (SRAS ) curve for an economy. Suppose that the economy is initially in a short-run equilibrium: at P E , and Real GDP is 20 trillion. Suppose that at some point, the price increases to P . At P , there is of trillion goods. As a result, the price level , firms output, and consumers consumption.