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 increases.
c.Is this economy in an expansion or recession now?
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?
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b. c.Because Y1 Y*,thi...View Answer
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