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For each letter option below, match it with the number option given that best models the change and why. [HINT: each letter option will have
For each letter option below, match it with the number option given that best models the change and why. [HINT: each letter option will have only one number option] [20 pts] A. The government of Country A increases its (T-G) when the country's economy is operating at its long-run equilibrium. B. A country's central bank increases the money supply to lower the unemployment caused by higher oil prices. C. Unemployment decreases because a rising price level has lowered real wages in the short run. D. The economy is in a deflationary gap and workers begin to expect a lower aggregate price level. E. Due to firms and workers becoming more pessimistic about the economy, the central bank of Country A increases the money supply. Options: 1) The initial decrease in AD is at least partially offset by an increase in AD 2) A movement up the SRAS curve due to growing demand 3) The SRAS curve shifts to the right, returning the economy to full employment 4) A decrease in total demand increases unemployment 5) Rising demand lowers the unemployment rate but worsens inflation
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