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In: Economics

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.

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Expert Solution

Rahul Sunny answered 8 months ago
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