Essay
Answer the following questions using an aggregate demand-aggregate supply model.
a.Represent an economy at long-run equilibrium.
b.Show what happens when aggregate demand decreases.
c.Is this economy currently in an expansion or recession?
d.What type of fiscal policy would you suggest be taken by Congress?
e.What will this policy do to your aggregate demand-aggregate supply model?
Correct Answer:
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a. 
b. c.Because Y1 Y*,this...View Answer
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Correct Answer:
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b. c.Because Y1 Y*,this...View Answer
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