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Suppose that the Canadian economy is currently in an economic boom. a. Construct a diagram and labelled it Diagram 2. For the graph, show

 

Suppose that the Canadian economy is currently in an economic boom. a. Construct a diagram and labelled it Diagram 2. For the graph, show each of the following components: short run aggregate supply curve, long run aggregate supply curve, and aggregate demand curve, labelled as SRAS, LRAS, and AD, i. current equilibrium real GDP and price level, labelled as Y, and P, and denoted as point A b. Suppose that there is an appreciation of the Canadian dollar. On Diagram 2, show how the events will affect each of the following: short run aggregate supply curve, long run aggregate supply curve, and aggregate demand curve, labelled as SRAS2, LRAS2, and AD iv. new equilibrium real GDP and price level, labelled as Y2 and P2, and denoted as point B On Diagram 2, show how the automatic wage adjustment will affect each of the following: short run aggregate supply curve, long run aggregate supply curve, and aggregate demand curve, labelled as SRAS), LRASS, and AD real GDP and price level, labelled as Ys and Ps. and denoted as point C V. vi.

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P 4AAM P K Diagram 2 1 in diagram a shows the initial short run aggregate supply curve SRAS Long run ... blur-text-image

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