13. (a) Housing prices rose sharply between 2002 and mid-year 2006. Use the ADAS model to illustrate

Question:

13.

(a) Housing prices rose sharply between 2002 and mid-year 2006. Use the AD–AS model to illustrate the impact of the housing price increases on output and employment.

(b) During 2007 and 2008, housing prices fell sharply. Use the AD–AS model to illustrate the impact of these price declines on output and employment.

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