i dont understand help

R

RapidCoyote

Member
The most I understood from that is the higher Y is the lower P is oof, so basically the higher the Aggregate output the lower the Price level. My guess is that AD is the average Price Level as AS is the average Aggregate output for both E1 and E2. Which basically means the higher AS is the closer AD is to the Y axis. I honestly dont know tho this is my guess
 
Caitlyn

Caitlyn

Member
I think I figured it out.

All the 1's are before the supply shift (to the left). and the 2 is after the Supply shift to the left. AS is the total supply of a product and AD is the total demand in the economy for the product. I believe Y is the Real GDP but I'm not sure.

I believe the graph is showing a Supply Shock. But tbh Idk if im correct. I think I know what it is but im not really sure.
 
P

Pump

Ah this is elementary, as we can see the quotient of the aggregate output is x^2 to the Price Level. meaning, if let’s say we make y1= cos/theta that would mean the angle of that line would give us E1 because E1 is adjacent, so simply y1= E1(2). But before you can do that you must find the slope of AD and assuming you can find two points on line AD you can find the equation which should look like this y= +_ square root of a. Once you do all of that getting the price level for the aggregate you want to calculate for is just adjusting some variables for the rational you already solved for. Hopefully that helped what is this for btw?
 
Last edited by a moderator:
Sniper

Sniper

Member
Pump said:
Ah this is elementary, as we can the quotient of the aggregate output is x^2 to the Price Level. meaning, if let’s say we make y1= cos/theta that would mean the angle of that line would give us E1 because E1 is adjacent, so simply y1= E1(2). But before you can do that you must find the slope of AD and assuming you can find two points on line AD you can find the equation which should look like this y= +_ square root of a. Once you do all of that getting the price level for the aggregate you want to calculate for is just adjusting some variables for the rational you already solved for. Hopefully that helped what is this for btw?
Click to expand...
Big brain plays
 
Caitlyn

Caitlyn

Member
Pump said:
Ah this is elementary, as we can see the quotient of the aggregate output is x^2 to the Price Level. meaning, if let’s say we make y1= cos/theta that would mean the angle of that line would give us E1 because E1 is adjacent, so simply y1= E1(2). But before you can do that you must find the slope of AD and assuming you can find two points on line AD you can find the equation which should look like this y= +_ square root of a. Once you do all of that getting the price level for the aggregate you want to calculate for is just adjusting some variables for the rational you already solved for. Hopefully that helped what is this for btw?
Click to expand...

lol
 
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