Answer the following questions using an aggregate demand-aggregate supply model when appropriate.
a.Use an aggregate demand-aggregate supply model to represent an economy at long-run equilibrium.
b.Show what happens on your model when aggregate demand increases.
c.Is the economy you modeled in an expansion or recession now?
d.Continuing with the economy you are building,what type of monetary policy would you suggest be taken by the Federal Reserve?
e.What will your suggested policy do to your aggregate demand-aggregate supply model in the short run?
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b. c.Because Y1 Y*,thi...View Answer
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