For this reason, brand new economy event straight down rising cost of living and better unemployment, depicted of the way out-of point A spot B about right-hands graph
The leftward shift of the Aggregate Demand curve decreases the price level and output, moving the short-run equilibrium to point B in the left-hand chart. In the long run, the Aggregate Supply curve shifts to the left in the left-hand chart as wages decline in response to the excess unemployment. Relative to point A, the economy has the same level of output but a lower price level (PLC versus PLA). We illustrate this scenario by a move along the Phillips curve from point B to point C in the right-hand chart. Continue Reading A beneficialt some point the newest economy movements to suggest C, once more a lengthy-work with equilibrium