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The Canadian economy is in long-run equilibrium. Assume the following events occur one at a time. Show the effect of each event on Aggregate Demand and Short-run Aggregate Supply in Canada by shifting only one curve. Potential GDP does not change. Label the change in equilibrium price P2 and output Y2 and equilibrium E2.
In your assignment use this graph format for each impact.
IMPACTS: (Draw new graph for each)
A. The value of the Can $ declines. B. World oil prices decrease. C. Canadian businesses plan to increase inventories
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