Long-run effects on output and the price level

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Reference no: EM13981076

For each of the following events, graph and explain the short-run & long-run effects on output and the price level, assuming policymakers take no action.

a) The stock market declines sharply, reducing consumers’ wealth.

b) The federal government increases spending on national defense.

c) A technological improvement raises productivity.

d) A recession overseas causes foreigners to buy fewer U.S. goods.

Reference no: EM13981076

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