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The figure illustrates a dynamic AD-AS model. Suppose the economy is in equilibrium in the first period at point A. In the second period, the

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The figure illustrates a dynamic AD-AS model. Suppose the economy is in equilibrium in the first period at point A. In the second period, the economy reaches point B. We would expect the Fed to pursue what type of policy in order to move AD, to AD2, policy and reach equilibrium (point C) in the second period? If the Federal Reserve Bank's policy is successful, what is the effect on the following macroeconomic Indicators? Actual real GDP Potential real GDP: Price level: Unemployment LRAS, LRASZ SRAS, SRAS, 113 112 .C 110 GDP deflator AD2. (policy) AD2 ADA 17 17137.4 Real GDP (trillions of 2009 dollars)

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