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For each of the following shocks, assume that the economy starts in long-run equilibrium, and expected inflation stays constant. Specify the type of shock and

For each of the following shocks, assume that the economy starts in long-run equilibrium, and expected inflation stays constant. Specify the type of shock and which curve(s) in the IS-MP-PC model shift (in words, no need to draw). Determine the immediate effect on the output gap Y, the real interest rate r and unexpected inflation. a. Business confidence increases unexpectedly

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