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Consider the economy of Neso. Neso, finds itself at the onset of a massive construction boom with many businesses and levels of government finalizing plans
Consider the economy of Neso. Neso, finds itself at the onset of a massive construction boom with many businesses and levels of government finalizing plans to build massive real-estate developments as well as infrastructure projects. Starting from long-run equilibrium: What curve is affected by this shock and why? [0.5] AI, due to northern housing crisis What kind of output gap will this economy be experiencing? [0.5] ai reference the is lm model Given the output gap, what short-run impact will this have on the unemployment rate relative to the natural rate? [0.5] Given the output gap, what short-run impact will this have on the price level? [0.5] AI, immigration will cause prices to rise Explain, concisely, how this economy will adjust to it's long-run equilibrium through the natural adjustment process? [1] Explain, concisely, how the government could assist to close this output gap
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