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Illustrate each of the following events using a demand and supply diagram for bananas.
1. Reports surface that imported bananas are infected with a deadly virus.
2. Consumers' incomes drop.
3. The price of bananas rises.
4. The price of oranges falls.
Consumers expect the price of bananas to decrease in the future.
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Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.
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