Use the model of aggregate demand and short-run aggregate supply to explain how each of the...

Use the model of aggregate demand and short-run aggregate supply to explain how each of the following would affect real GDP and the price level in the short run.

a. A decrease in government purchases

b. A major improvement in technology

c. A trade surplus

d. An increase in labor cost

Question 2:

Suggest a monetary policy to adjust the situation in scenario d.

Solutions

Expert Solution

Rahul Sunny answered 1 month ago

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