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    Exam 11: Classical and Keynesian Macro Analyses
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    Suppose the Economy in the Diagram Below Is in Long-Run
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Suppose the Economy in the Diagram Below Is in Long-Run

Question 123

Question 123

Essay

Suppose the economy in the diagram below is in long-run equilibrium. If government spending decreases and causes a movement from point A to point B in the diagram below, what are the short-run effects? Explain fully.

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blured image In the above figure, point A is the ori...

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