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explain each in 250 words if possible Q1. What are business cycles? Explain using diagrams. How do they impact GDP and employment? What do you
explain each in 250 words if possible
Q1. What are business cycles? Explain using diagrams. How do they impact GDP and employment? What do you think causes them? How does the economy adjust to reduce the impact of a recession on employment? Q2: Growth in potential output is determined by growth in the labour force and growth in labour productivity. Suppose there is growth in both the labour force and labour productivity, based on increased capital and improved technology. (a) Illustrate the growth in potential output in an AD/AS diagram. (b) Aggregate demand is not changed by the change in potential output. Indicate any output gap caused by the change in potential output Step by Step Solution
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