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Suppose that the stock market declined sharply, reducing consumers' wealth. a. What are the implications of this wave of pessimism on the economy? Use the
Suppose that the stock market declined sharply, reducing consumers' wealth. a. What are the implications of this wave of pessimism on the economy? Use the AS-AD model to depict the impact of this event on the economy. b. How can the government use monetary policy to return the economy to equilibrium? Graph your answer. c. Describe the algorithm that motivated your answer in part (b ).
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