consider the assumptions of the classical model.\n1.) using the line drawing tool, draw the long - run…

consider the assumptions of the classical model.\n1.) using the line drawing tool, draw the long - run aggregate supply curve such that real gdp is $10 trillion.\n2.) using the line drawing tool, draw the aggregate demand curve. properly label your line.\ncarefully follow the instructions above, and only draw the required objects.\nsuppose that aggregate demand were to increase due to a weaker dollar. which of the following would be the result?\na. an increase in real gdp and deflation.\nb. deflation only.\nc. an increase in real gdp and inflation.\nd. inflation only.

consider the assumptions of the classical model.\n1.) using the line drawing tool, draw the long - run aggregate supply curve such that real gdp is $10 trillion.\n2.) using the line drawing tool, draw the aggregate demand curve. properly label your line.\ncarefully follow the instructions above, and only draw the required objects.\nsuppose that aggregate demand were to increase due to a weaker dollar. which of the following would be the result?\na. an increase in real gdp and deflation.\nb. deflation only.\nc. an increase in real gdp and inflation.\nd. inflation only.

Answer

Brief Explanations:

In the Classical Model, the long - run aggregate supply curve is vertical at the full - employment level of real GDP. An increase in aggregate demand due to a weaker dollar (which makes exports more competitive and imports more expensive) will shift the aggregate demand curve to the right. Since the long - run aggregate supply curve is vertical in the Classical Model, this rightward shift in aggregate demand will only lead to an increase in the price level (inflation) and no change in real GDP in the long run.

Answer:

D. Inflation only.