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1. Define the term stabilization policy and describe how it can be used to reduce the volatility of economic growth and inflation. Do stabilization policies improve welfare? 2. Will changes in technology affect the rate at which the short-run aggregate supply curve shifts in response to an output gap? Why or why not? Provide some specific examples of how technology will change the rate of adjustment. 3. How could you use the aggregate demand-aggregate supply framework to explain the impact of the financial crisis of 2007-2009 on inflation and output in the economy