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a) Explain what supply side policy is and how this policy can improve the economy. b) Assume a technological advance leads to lower production costs.

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a) Explain what supply side policy is and how this policy can improve the economy. b) Assume a technological advance leads to lower production costs. Show the effect of such an event on national income, unemployment, ination and interest rates with the help of an ADAS diagram, assuming wages a exible. (AS is positively sloped)

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