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Think about the AD-AS model presented in the last week of class. If an economy experiences a massive reduction in autonomous investment (like in question
- Think about the AD-AS model presented in the last week of class. If an economy experiences a massive reduction in autonomous investment (like in question 26), what would happen to equilibrium (where the AD and AS lines cross)?
- The price level (P) would increase and output (Y) would not change.
- P would decrease and Y would not change.
- P and Y would both decrease.
- P and Y would both increase.
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