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During the recent Pandemic, the unemployment rate rose to record levels, Real GDP dropped and the inflation rate fell. (a) What type of short run
During the recent Pandemic, the unemployment rate rose to record levels, Real GDP dropped and the inflation rate fell.
(a) What type of short run equilibrium is being mentioned here? Draw an AD/AS diagram.
(b) What would be the goal of policy makers in this case?
(c) Explain how Fiscal Policy and Monetary Policy could be used to accomplish this? (Include diagrams)
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