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25. Unemployment would decrease and prices increase if
a. aggregate demand shifted right
b. aggregate demand shifted left!
c.aggregate supply shifted right.
d. agregate supply shifted lett.
e aggregate supply and aggregate demand shifted right.

Just give a short explanation of the answer
Will MARK BRAINLIEST

Respuesta :

veronicaculs

Answer:

a. Agreggate demand shifted right.

Explanation:

  • Holding everything else constant, an in increase in aggregate demand (AD) curve will increase prices and increase product, therefore unemployment will decrease. This would happend when facing an aggregate supply (AS) curve as the one shown in the graph, that means the economy has not reach its potencial product yet (but is not so far from it).
  • AD increase would push prices up initially , because there is an increased in the demand of all the products without an increase in production. Because of price increase, real wage ([tex]\frac{nominal_.wage}{prices}[/tex] would reduce, therefore making it more profitable for producers to hire employers. This will result in an decrease of unemployment and an increase in final production (See the grapch attached).
Ver imagen veronicaculs

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