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Question 4 (2 marks): Assume the economy is initially in a long-run equilibrium. a. Use the AD-AS and the Philips curve
Posted: Wed Jul 06, 2022 5:59 am
by answerhappygod
- Question 4 2 Marks Assume The Economy Is Initially In A Long Run Equilibrium A Use The Ad As And The Philips Curve 1 (43.92 KiB) Viewed 14 times
Question 4 (2 marks): Assume the economy is initially in a long-run equilibrium. a. Use the AD-AS and the Philips curve diagrams to show the short-run effects on prices (inflation) and output (unemployment) if home currency appreciated significantly against trade partners' currencies. b. In order to maintain output what would government do with fiscal policy in response to the event in part (a)?