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Beginning at Long-Run Equilibrium, (I)use the Basic (Static)aggregate Demand and Aggregate

Question 94

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Beginning at long-run equilibrium, (i)use the basic (static)aggregate demand and aggregate supply model to illustrate what happens in the short run when the economy suffers a supply shock, and (ii)use the basic (static)aggregate supply and demand model to illustrate what happens in the long run following this supply shock.
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Beginning at long-run equilibrium, (i)use the basic (static)aggregate demand and aggregate supply model to illustrate what happens in the short run when the economy suffers a supply shock, and (ii)use the basic (static)aggregate supply and demand model to illustrate what happens in the long run following this supply shock.
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(i)In the following graph, the economy i...

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