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Figure: ADAS Manon. prie- lwci, F y. Run our Refer to Figure: ADAS. Suppose that the economy starts at 51 and moves to E2, where ADZ intersects...

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5. Figure: AD—AS Manon.
prie-
lwci, F y. Y. Run our Refer to Figure: AD—AS. Suppose that the economy starts at 51 and moves to E2, where ADZ intersects SRASl. Finally, the economy moves to E3. The classical model of price level
assumes that the economy moves from ; thus, inflation and real GDP . u E1 to E3, ignoring E2; increases; remains the same
L} E1 to E2, ignoring 53; remains the same; remains the same
tr; E2 to E3; decreases; remains the same L, E2 to E3, ignoring E1; remains the same; increases

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