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a. With the aid of AD-AS diagram, illustrate and explain how a rise in the price of raw materials and rental cost would affect the

a. With the aid of AD-AS diagram, illustrate and explain how a rise in the price of raw materials and rental cost would affect the price level and real GDP. Indicate the type of inflation.

b. Use the same diagram from part (a), illustrate and explain how the government could use fiscal policy to reduce inflation.

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