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Suppose "expectations increase dramatically" (too much "buy now" behavior) in the mini-economy and the resulting demand shift causes the average price to rise from $2.20 to $2.40 in the circular flow. In the PPF Model then, the equilibrium would move from Point S to Point ________..

Respuesta :

aaregbe

Answer:

Point P

Explanation:

The change of equilibrium conditions from point S to point P leads to an extreme inflation. Extreme inflation is also known as hyperinflation and it is a condition whereby there is an extremely high and increasing rate of inflation. This hyperinflation can easily devalue the currency in the country. In addition, the price of goods and services also increases.

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