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Explain the meaning of monetary neutrality and illustrate graphically that there is monetary neutrality in the long run in the aggregate demand-aggregate supply model. Be
Explain the meaning of monetary neutrality and illustrate graphically that there is monetary
neutrality in the long run in the aggregate demand-aggregate supply model. Be sure to label:
8
i. the axes
ii. the curves
iii. the initial equilibrium values
iv. the direction to which the curves shift
v. the short-run equilibrium values
vi. the long-run equilibrium values.
Explain in words what your graph illustrates.
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