Macroeconomic Shocks & Policies
-Suppose the economy is in a long-run equilibrium when a temporary,favorable aggregate supply shock occurs.On the graphs above,show what happens to bring the economy back to long-run equilibrium,assuming that there is no policy response.In words,explain why "no response" is the best policy.

Question

Macroeconomic Shocks & Policies 
-Suppose the economy is in a long-run equilibrium when a temporary,favorable aggregate supply shock occurs.On the graphs above,show what happens to bring the economy back to long-run equilibrium,assuming that there is no policy response.In words,explain why "no response" is the best policy.

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The Answer of Macroeconomic Shocks & Policies 
-Suppose the economy is in a long-run equilibrium when a temporary,favorable aggregate supply shock occurs.On the graphs above,show what happens to bring the economy back to long-run equilibrium,assuming that there is no policy response.In words,explain why "no response" is the best policy.