Question

Optimism Imagine that the economy is in long-run equilibrium. Then, perhaps because of improved international relations and increased confidence in policy makers, people become more optimistic about the future and stay this way for some time. Refer to Optimism. Which curve shifts and in which direction? aggregate demand shifts right aggregate demand shifts left aggregate supply shifts right. aggregate supply shifts left. Refer to Optimism. In the short run what happens to the price level and real GDP?

Answer 1

Answer:

1. aggregate demand shifts right

2. Price level would rise and gdp would rise

Step-by-step explanation:

I. the curve shifts right because of the increase in consumption due to the optimistic image created.

2.Price level would increase due increase in demand their by cause a new micro economic equilibrium giving rise to real GDP.