Framework and assuming no macroeconomic policies

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Using the AS-AD framework and assuming no macroeconomic policies are used to stabilize the economy, illustrate and explain what happens to the economy in the short-run and over time if it begins in a steady state but then suddenly experiences a decline in foreign demand for its goods.

Make sure to appropriately use economic models/graphs to substantiate your analysis and explain your answer.

Reference no: EM131161752

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