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Unformatted text preview: (Read the entire subsection, but focus on the last paragraph.) 6. In the new Keynesian view, why may monopolistically competitive firms not continuously adjust their prices? 7. List the three factors that shift the short-run aggregate supply curve? Why does an increase in these factors cause the short-run aggregate supply curve to shift up and to the left? 8. List the two factors that shift the long-run aggregate supply curve? Why does an increase in each of these factors cause the long-run aggregate supply curve to shift outward? Lastly, list the four principal sources of productivity growth. 9. Starting in long-run equilibrium, graph and briefly explain the short-run effect and the long-run effect on the price level and real GDP of an increase in aggregate demand. 10. Do changes (shifts) in aggregate demand affect real GDP in the long run? The price level in the long run? Support your answer using the aggregate demand-aggregate supply model....
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This homework help was uploaded on 04/18/2008 for the course ECON 412 taught by Professor Gillette during the Spring '08 term at Kentucky.
- Spring '08