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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 Phillips curve
Posted: Wed Jul 06, 2022 6:22 pm
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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 Phillips Curve 1 (31.18 KiB) Viewed 11 times
Question 4 (2 marks): Assume the economy is initially in a long run equilibrium. a. Use the AD-AS and the Phillips curve diagrams to show the short-run effects on prices (inflation) and output (unemployment) if government cut income taxes. b. In order to stabilize prices what would central bank do with monetary policy in response to the event in part (a)?