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Assume the economy is in long run equilibrium. Due to an increase in the stock market, consumption has skyrocketed. The economy is now experiencing an
Assume the economy is in long run equilibrium. Due to an increase in the stock market, consumption has skyrocketed. The economy is now experiencing an inflationary gap.Graph the inflationary gap and then show how a classical economist would allow the market to "self-correct" itself. Explain how your graph operates below
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