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The Australian economy is currently in a short-run equilibrium where equilibrium output is above potential output. Consider the following five shocks that could affect this
The Australian economy is currently in a short-run equilibrium where equilibrium output is above potential output. Consider the following five shocks that could affect this economy in the short run: (1) Increases in business confidence lead to an exogenous increase in planned investment (Il) Government spending is reduced (Ill) Cuba opens up its economy and decides to import Australian wheat (IV) The RBA decreases real interest rates (V) The RBA increases real interest rates Which of the following shocks would move output towards potential in the short run: 19 25 Untit Untitl 35 36 41 42 a. Ill and V b. Il and V c. I, Ill and IV d. None of the other answers are correct. e. I and
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