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You will create an Aggregate Supply and Demand graph for Years 2009-2010 (Great Recession). You will use the Static Aggregate Supply and Demand Model, so
You will create an Aggregate Supply and Demand graph for Years 2009-2010 (Great Recession). You will use the "Static" Aggregate Supply and Demand Model, so the LRAS will not shift. See the Footnotes for more information.
Label your graph as follows (labels in parentheses)
- a. 2009 Aggregate Demand (AD1)
- i. 2009 Price Level (PLe1)
- ii. 2009 Output (Y1)
- iii. 2010 Price Level (PLe2)
- iv. 2010 Output (Y2)
- b. 2010 Aggregate Demand (AD2)
- c. Short Run Aggregate Supply (SRAS)
- d. Long Run Aggregate Supply (LRAS)
- i. Output at Full Employment (Yf)
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