6.02 Task.docx - Facilitator School 6.02 AS-AD Model For...

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Facilitator: School: 6.02 AS-AD Model For each given situation, explain what will happen to price level and output . Depending on the shift of the curve, will the country be in a recessionary or inflationary gap ? Start each scenario in long run equilibrium . Situation Which curve shifts? Which direction? Price Level and Output Increase or Decrease The cost of oil rises sharply AS to the left Price level increases Output decreases 1. The Government increases spending sharply on infrastructure AD to the left PL- Increases O- Decreases 2. American goods increase in demand from foreign buyers AD to the right PL- Decreases O- Increases 3. Immigration into the
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Christopher Reinemann
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