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f the short-run IS-LM equilibrium occurs at a level of income below the natural level of output, then in the long run the price level will ______, shifting the ______ curve to the right and returning output to the natural level. a. increase; IS b. decrease; IS c. increase; LM d. decrease; LM

Sagot :

bharathparasad577

Decrease; LM

  • When the total amount of output required and supplied equals one another, an economy is in short-run equilibrium. When total output and total demand are equal, this is referred to as short-run equilibrium.
  • As usual, the LM curve is produced for a set price level P1. The point K where the IS curve crosses the LM curve represents the short-run equilibrium of the economy. Take note that the economy's income is lower than its natural level in this short-run equilibrium.
  • Economic equilibrium in economics refers to a scenario where supply and demand are balanced and the values of economic variables do not change in the absence of external factors.

Thus this is the answer.

To learn more about economic equilibrium, refer:https://brainly.com/question/14297698

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