What happens to the economy in the short run

Reference no: EM133614309

Problem: Businesses have to accommodate workers and customers for their safety with personal protective gears, and social distancing, such as limit the number of customers. Furthermore, many consumers are cutting their spending due to negative news, such as temporary pay cuts and economic uncertainty in the near future. Assume the economy starts at the LR equilibrium use AD and AS to answer what happens to the new equilibrium price level and output in the economy. With the given information, what happens to the economy in the short run? What happens to the economy in long run, explain how long run adjustment occurs.

Reference no: EM133614309

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