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Use the following diagrams for the U.S. economy to answer the next question. AS1 AS2 AS2 AS1 Price Level Price Level AD Real GDP (1) Real GDP (2) Price Level Price Level AS AD AS AD2 AD1 Real GDP (3) AD1 AD2 Real GDP (4) Which of the diagrams best portrays the effects of an increase in resource productivity?
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An increase in resource productivity means that the economy can produce more output with the same amount of resources. This typically shifts the Aggregate Supply (AS) curve to the right. Show more…
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