In the long run, when the government pursues an accommodative policy, the output in the economy will be $80 billion and the price level will be $90 billion.
Due to the increase in the prices of oil and consequently the increase in the cost of producing goods and services in the economy, the short-run aggregate supply curve shifts to the left. As a result, in the short run, the output is established at a level lower than the natural level of output.
Now, the government pursues an accommodative policy in anticipation of the fall in output.
As a result, the AD curve shifts to the right, and the long-run equilibrium is restored at the natural level of output but at a higher price level than before.
To know more about the economy refer to the link:
https://brainly.com/question/2421251
#SPJ4
