How would a shock that reduces production costs in the economy (a positive supply shock) affect equilibrium
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How would a shock that reduces production costs in the economy (a positive supply shock) affect equilibrium output and infl ation in both the short run and the long run? Illustrate your answer using the aggregate demand–aggregate supply framework. You should assume that the shock does not affect the potential output of the economy.
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Related Book For
Money Banking And Financial Markets
ISBN: 9780073375908
3rd Edition
Authors: Stephen Cecchetti, Kermit Schoenholtz
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