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Question 6 35 pts The nations of Lilliput and Blefuscu are at war again. The central bank of Lilliput, fearing a deep recession, is contemplating
Question 6 35 pts The nations of Lilliput and Blefuscu are at war again. The central bank of Lilliput, fearing a deep recession, is contemplating what it should do (if anything) to help ease the economic pain of this episode. Using the AD/AS model, evaluate how the central bank might respond, and what would be the implications for both economic growth and inflation. Be sure to make note of which curve (AD or LRAS) is doing the shifting in this case
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