Draw a dynamic aggregate demand and aggregate supply graph showing the economy moving from potential GDP in
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Draw a dynamic aggregate demand and aggregate supply graph showing the economy moving from potential GDP in 2021 to potential GDP in 2022, with no inflation.
Your graph should contain the AD, SRAS, and LRAS curves for both 2021 and 2022 and should indicate the short-run macroeconomic equilibrium for each year and the directions in which the curves have shifted. Identify what must happen for the economy to experience growth during 2022 without inflation.
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