Assume that the economy is originally in longrun equilibrium and that there is a drop in demand.
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Assume that the economy is originally in longrun equilibrium and that there is a drop in demand. Use graphs to explain how and why the economy initially moves to a short-run equilibrium with unemployment. How does the economy return to long-run equilibrium?
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When there is a drop in demand in an economy that is initially in longrun equilibrium the economy may experience a shortrun equilibrium with unemploym...View the full answer
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Related Book For 
Financial System Of The Economy Principles Of Money And Banking
ISBN: 9780765622464
5th Edition
Authors: Maureen Burton,Bruce Brown
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