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The economy is in a recession with high unemployment and low output. Use a graph of aggregate demand and aggregate supply (AD-AS diagram) to illustrate
The economy is in a recession with high unemployment and low output. Use a graph of aggregate demand and aggregate supply (AD-AS diagram) to illustrate the current situation. Be sure to include the aggregate demand curve, the short-run aggregate supply curve, and the long-run aggregate supply curve. Now, suppose the Fed expands the money supply to help the economy to recover from the recession. Using AD-AS diagram, show how it will help the economy to get back to the long-run equilibrium
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