b. Explain your answer to part a with the help of the ADAS model. Draw a typical

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b. Explain your answer to part a with the help of the AD–AS model. Draw a typical diagram showing two equilibrium points (E1) and (E2). Label the vertical axis “Aggregate price level” and the horizontal axis “Real GDP.” Assume that all other major macroeconomic factors remain unchanged.

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Krugmans Economics For Ap

ISBN: 9781429218276

2nd Edition

Authors: Margaret Ray, David A. Anderson

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