Use the accompanying diagram to answer questions a and b. a. Starting from the initial equilibrium in
Question:
a. Starting from the initial equilibrium in the diagram, illustrate the case of a supply-side fiscal policy that left the price level unchanged.
b. Compared to your answer in a, when would a supply-side fiscal policy result in an increase in the pricelevel?
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RAS SRAS Co AD 0 RGDPNR Real GDP
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a This is what happens when the supplyside policy shifts ...View the full answer
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