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For the following event, explain the short run and long run effects on output and price level , assuming policymakers take no action. Event: the

For the following event, explain the short run and long run effects on output and price level , assuming policymakers take no action.

Event: the federal government increases spending on national defense.

Describe the situation of the economy in the short run. Describe the adjustment to the long run equilibrium if the government does nothing. Explain with words + graphs.

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