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5. Use the following diagram to answer questions (a) and (b). a. On the diagram provided, illustrate the short-run effects of a decrease in government
5. Use the following diagram to answer questions (a) and (b). a. On the diagram provided, illustrate the short-run effects of a decrease in government purchases. What happens to the price level, real output, employment, and unemployment? b. On the diagram provided, illustrate the long-run effects of a decrease in government purchases. What happens to the price level, real output, employment, and unemployment? What are the final goods or services that are used to compute GDP? a. the goods and services purchased by the ultimate users b. the sum of all wages paid to labourers c. the value of outstanding shares of stock of manufacturing firms d. the factors of production used to produce output
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