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Assume the real GDP of a fictitious country has declined significantly over the last three quarters. Now assume four economists representing the classical, Keynesian, monetarist,
Assume the real GDP of a fictitious country has declined significantly over the last three quarters. Now assume four economists representing the classical, Keynesian, monetarist, and supply-side schools of macroeconomic thought are brought in to help solve the issue. Answer the following questions:
- Explain what policy recommendations each of the four economists would make and why.
- Explain how their policy recommendations affect output, price level, and unemployment in the short run and long run.
- Using the AD/AS model, demonstrate graphically how each proposal could work. (I really want to make sure my graphs are correct, so please don't forget to answer this question.)
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