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Because of the ongoing pandemic, output has declined below its long-run equilibrium. The government is then...

Because of the ongoing pandemic, output has declined below its long-run equilibrium. The government is then interested in pushing output back to its original level. Demonstrate what happens Using the Keynesian Cross and IS-LM Model, demonstrate how output and the real interest rate changes from the Short-run to the Long-run if the government implements policy that raises output back to its full-potential. (posted earlier, but explanation was insufficient with SR and LR)

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Rahul Sunny answered 2 years ago
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