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Suppose that an economy begins in equilibrium at E, as depicted in the graph to the right. Assume that the economy follows the Classical Model
Suppose that an economy begins in equilibrium at E, as depicted in the graph to the right. Assume that the economy follows the Classical Model assumptions. a. Using the line drawing fool, draw a new aggregate demand (AD) curve reflecting a decrease in the amount of money in circulation. Properly label this line. Carefully follow the instructions above, and only draw the required objects. Price level 1404 LRAS 1304 1204 1104 Y0k ensunannnununnunsnnunsnamanans 94 a0+ AD 7+ 0 2 4 6 8 o 12 14 18 Real GDP (& trillions)
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