1. How is the short-run different from the long run? What is the main theoretical difference?...

1. How is the short-run different from the long run? What is the main theoretical difference? Use graphs to illustrate.

2. Do you think the ongoing COVID-19 pandemic is a short-run fluctuation? If so, can the Fed take up policies to mitigate its negative impact on the economy? Explain.

(Hint: What is the nature of this shock? Is it a demand or supply shock? Or, is it different than a regular demand or supply shock the policymakers need to think out of the box to deal with it?)

Expert Solution

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Rahul Sunny answered 7 months ago

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