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4. Suppose there is a positive or an expansionary AD shock in the economy. Graphically show how the output gap can be bridged through fiscal

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4. Suppose there is a positive or an expansionary AD shock in the economy. Graphically show how the output gap can be bridged through fiscal policy. (10 marks) 5. Show the effect expansionary monetary policy on output and prices in the following cases for an open economy: (10 marks) a. Short run b. Long run

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