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In: Economics

Consider an economy that begins in long-run equilibrium. Use the IS-LM diagram and the aggregate supply...

Consider an economy that begins in long-run equilibrium. Use the IS-LM diagram and the aggregate supply - aggregate demand diagram to explain how a decrease in the money supply (Ms∆<0) will affect the equilibrium values of GDP, the price level, interest rates, consumption, investment, and the supply of real money in both the short and the long run. (Note: You only need to present and discuss the IS-LM and AS-AD diagrams; you do not need to present analysis in any other diagrams.)

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Rahul Sunny answered 2 years ago
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