Assume a nation has an output level of 150 units per year, and that consumption is also 150. Suppose there is a sudden temporary drop in GDP by 16%. What does the long-run consumption path look like if this country has access to global financial markets with an interest rate of 5%?

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The Answer of Assume a nation has an output level of 150 units per year, and that consumption is also 150. Suppose there is a sudden temporary drop in GDP by 16%. What does the long-run consumption path look like if this country has access to global financial markets with an interest rate of 5%?

Assume a Nation Has an Output Level of 150 Units