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Consider an economy where output is at the natural level and inflation is constant. Assume te=t-1. A global pandemic starts and spreads across the globe.
Consider an economy where output is at the natural level and inflation is constant. Assume te=t-1. A global pandemic starts and spreads across the globe.
Describe how this pandemic would affect the supply side of the U.S. economy. What would be the impact of supply side pressure on the output level, unemployment rate, and inflation rate? Illustrate your answers using the IS/LM-WS/PS-PC diagrams.
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