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Use the aggregate demand curve derived from the quantity equation of money:
MV=PY
M/P = kYk=(1/V)
Suppose the Fed reduces the money supply by 5 percent.
a. What happens to the aggregate demand curve?b. What happens to the level of output and the price level in the short run and in the long run?c. According to Okun's law, what happens to unemployment in the short run and in the long run?d. What happens to the real interest rate in the short run and in the long run?
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Price elasticity of demand, Income elasticity of demand and Cross elasticity of demand of toyota corolla car.
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Using the results obtained above, derive a table for the long run costs of the various levels of production of sweaters (10, 20, 30, 40). The table should show: quantity, total cost, average cost and marginal cost.
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