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Refer to the following figure to answer the following questions. Price level LRAS SRAS3 SRAS1 CO SRAS2 O AD2 Real GDP S The economy is

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Refer to the following figure to answer the following questions. Price level LRAS SRAS3 SRAS1 CO SRAS2 O AD2 Real GDP S The economy is in a Long Run Macroeconomic Equilibrium at Point A. Suddenly, some event causes an Increase in Aggregate Demand, but the government promptly responds with Countercyclical Fiscal Policy. What is the new Short Run Macroeconomic Equilibrium (SRME) that will occur, and the Long Run Macroeconomic Equilibrium (LRME) that will occur following the Countercyclical Fiscal Policy response? SRME Point E ; LRME Point B O SRME Point B ; LRME Point E O SRME Point B ; LRME Point A O SRME Point F ; LRME Point E SRME Point A ; LRME Point B

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