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Aggregate demand and supply

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Aggregate Demand and Supply

(a) Derive the AD curve from IS-LM. Explain in words.

Show using the AD-SRAS-LRAS curves what happens to real interest rate, output and prices in each of the following scenarios in the short-run and the long-run.

(b) Real money supply increases

(c) A temporary increase in government purchases for military purposes. Will it matter whether the temporary increase in military spending is funded by taxes or by borrowing?

Reference no: EM132299154

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