Using aggregate demand, short-run aggregate supply, and long-run aggregate supply curves explain the process and causes by
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Using aggregate demand, short-run aggregate supply, and long-run aggregate supply curves explain the process and causes by which each of the following economic events will move the economy from one long-run macroeconomic equilibrium to another. In each case, explain the short-run and long-run effects on the aggregate price level and aggregate output.
a. There is a decrease in households’ wealth due to a decline in the stock market.
b. The government lowers taxes, leaving households with more disposable income, with no corresponding reduction in government purchases.
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Related Book For
Macroeconomics
ISBN: 978-1319120054
3rd Canadian edition
Authors: Paul Krugman, Robin Wells, Iris Au, Jack Parkinson
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