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2.6. Illustrate the economy's long-run equilibrium on your figures from #1. Clearly label any new curve and equilibrium values. Label the new long run-equilibrium Point
2.6. Illustrate the economy's long-run equilibrium on your figures from #1. Clearly label any new curve and equilibrium values. Label the new long run-equilibrium Point C. [4] 2.7. Based on your diagrams, how do the following variables change in the short run (Point A to Point C): [2.5] Real interest rate Increase Decrease No Change . Output Increase Decrease No Change . Consumption Increase Decrease No Change . Investment Increase Decrease No Change . Inflation Increase Decrease No Change
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