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Using the IS/LM and AS/AD framework, discuss what would happen to r, y, and the price level (p) in both the short and long run.

Using the IS/LM and AS/AD framework, discuss what would happen to r, y, and the price level (p) in both the short and long run. Show the IS/LM and AS/AD graphs for full credit.

1. There is an exogenous decrease in money demand.

2. Consumer confidence increases

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