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Question 4 Refer to the below figure to answer the following, questions. Price level (GDP deflator, 2000 = 100) SRAS, SRAS2 AD1 AD2 Real GDP

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Question 4 Refer to the below figure to answer the following, questions. Price level (GDP deflator, 2000 = 100) SRAS, SRAS2 AD1 AD2 Real GDP (trillions of 2000 dollars) a. Name two points in the above graph that are possible long-run equilibrium. b. Name two points in the above graph that are possible short-run equilibrium but not long-run equilibrium. Assume that Y1 represents potential GDP c. Suppose the economy is at point A. If investment spending increases in the economy, where will the eventual long-run equilibrium be? d. Suppose the economy is at point C. If government spending decreases in the economy, where will the eventual long-run equilibrium be

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