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Q1). a) Illustrate the effect of a rise in wealth caused by a boom in stock markets on the entire economy with an AD-AS (aggregate

Q1). a) Illustrate the effect of a rise in wealth caused by a boom in stock markets on the entire economy with an AD-AS (aggregate demand- aggregate supply) diagram. Explain briefly.

b) . Illustrate the effect of a fall in the price of crude oil on the entire economy with an AD-AS diagram. Explain briefly.

c) . What do you find by comparing your analysis in part a with that in part b? Why does this matter for a policymaker in reality?

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