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In the early to mid-2000s the Australian economy was experiencing rapid economic expansion, leading to an economic boom. By 2007, data indicated that actual real
In the early to mid-2000s the Australian economy was experiencing rapid economic expansion, leading to an economic boom. By 2007, data indicated that actual real GDP had exceeded potential GDP, and the unemployment rate was the lowest it had been in over 30 years. a) Use a basic aggregate demand and aggregate supply graph to illustrate this situation. b) Explain how it was possible for actual real GDP to be greater than potential GDP at this time
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