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Effects of the increase in unemployment benefits
Suppose that the unemployment benefits provided by the private sector (firms) are increased permanently, please answer the following questions:
A) What will happen to Y (GDP), r (real interest rate), P(price level), and I(investment), in the short run?
B) What will happen to Y, r, P, and I, in the long run?
Under the concept of equilibrium whenever dealing with quantity and price.
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