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Using the graphs provided as your starting point (the economy is currently at ?1 and Y1) please graphically analyze the impact on the economy from
Using the graphs provided as your starting point (the economy is currently at ?1 and Y1) please graphically analyze the impact on the economy from the following events in both the short-run and the long-run. Please indicate the short-run inflation and aggregate output as ?2 and Y2 respectively, and use ?3 and Y3 for the long-run. Also, assume that there is no monetary policy or fiscal policy response to these events.
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