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The diagram in the figure below shows aggregate demand for New Caprica last year (AD) and this year (AD2). Price ($) P P 0
The diagram in the figure below shows aggregate demand for New Caprica last year (AD) and this year (AD2). Price ($) P P 0 LRAS AD 2 SRAS AD 1 20 40 60 80 100 120 140 160 If you were to advise the president of New Caprica on economic policy, how would you answer the following? Instructions: Enter your answers as whole numbers. a. Current output is $ million. million, and potential output is $ million. There is (Click to select) of output of $ b. New Caprica is in a recession c. The president should enact expansionary fiscal policy. d. The aggregate demand curve would shift to the (Click to select) if the president used contractionary fiscal policy.
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