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Suppose that the economy starts at the long-run equilibrium, the price level is 120 and the natural rate of output is $600 billion. Then there
Suppose that the economy starts at the long-run equilibrium, the price level is 120 and the natural rate of output is $600 billion. Then there is a significant technology improvement, According to AD-AS model, what would be the most probably paths for output and prices? Y: $600 billion, $650 billion, $700 billion; P: 120, 110, 105. Y: $600 billion, $650 billion, $700 billion; P: 120, 130, 135. Y: $600 billion, $650 billion, $650 billion; P: 120, 130, 130. Y: $600 billion, $600 billion, $600 billion; P: 120, 110, 105. Y: $600 billion, $650 billion, $600 billion; P: 120, 110, 120
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