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Use the IS-LM-PC and the PS/WS model to illustrate how the economy adjusts to an oil-shock in the case where expectations are anchored, and the

Use the IS-LM-PC and the PS/WS model to illustrate how the economy adjusts to an oil-shock in the case where expectations are anchored, and the Y-axis of the PC graph represents the level of inflation. Detail what happens during the stabilization period.

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